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Dermo Cosmetic Business In Egypt Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 2502 words Published: 1st Jan 2015

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Cosmetic industry is a multi-billion dollar industry with global sales reaching about 170 billion dollars a year which is distributed uniformly around the world (Datamonitor analysis)

Classically cosmetic industry can be divided down into 5 segments which are hair care, skin care, fragrance, make-up, others. The hair & skin care segments are further classified into pure cosmetics and Dermo-Cosmetics. Thus dermo-cosmetics refers to industry which involve sun care, dry skin care, anti-aging care, oily skin care, sensitive skin care, baby care, hair care and oral care(Euromonitor International – Reportlinker)

According to the Euromonitor report for August 2012 the economic recession in 2011 strongly affected dermo-cosmetic market in Egypt. Demand growth for skin care was decreased to 4% growth on average across all product segments, compared to a past period compound annual growth rate of 6%.

According to the euromonitor report – August 2012 the skin care market remains fractured, with high mix of local and international players with Eva Cosmetic Laboratories as the leading company in Dermo-cosmetics which maintained its market share at 17%, holding Unilever which at 15% market share in 2011.

Nowadays, there are lots of brands working in the Dermo-cosmetic business in Egypt with most of them having – to a great extent – similar business models and marketing communication plans and competing for the same customer.

Dermo-cosmetic business in Egypt shows lack of information on the factors that trigger the buying behavior of the customer.

Problem definition

The Dermo-Cosmetic business in Egypt is a new business (less than 30 years old) and didn’t have the chance to be studied yet and there is a lack of information on the factors that drive the consumer to buy products without prescription.

No study till today was published to explore the purchase intention of the consumer towards the dermo-cosmetic products on global or local base. In USA there were few studies on the personal care product but it covered the purchase intention towards that of organic type only and only in relation with the green attitude and values of the consumer and his previous experience with other organic products but there is no published studies on the Dermo-Cosmetic industry worldwide that covered the purchase intention of the consumer.

Determining and exploring the factors affecting the consumer buying decision will help Dermo-cosmetic firms in Egypt to develop programs adapted to their customer needs.

Research objective

The objective of this research is to explore the consumer purchase intention for Dermo-cosmetic products in Egypt and to determine and understand the factors which affect this purchase intention which will allow companies working in that industry in Egypt to capitalize on these factors and helps companies to realize the factors that need to be focused on in order to succeed in the Egyptian market and will also help pharmacists to differentiate between dermo-cosmetic brands on basis of their customer focus strategies.

Theoretical framework

In this research, the model which is intended to be used is compiled from different literatures and adapted from different models and theories. The model aims at establishing the relationship between five independent variables together with other two moderating variables and their effect and impact on the consumer purchase intention towards dermo-cosmetics in Egypt.

Figure 1.1 (The conceptual model)

(Zeithaml, 1988; Dodds et al, 1991; Ozsomer and Cavusgil 1991; Churchill and Peter, 1998 Terrazas, 2006; Kim and Chung, 2011; Suki, 2011; Levy and Gendel-Guterman, 2012)

This research examines the relations among the following dependent, independent and moderating variables

Dependent Variable (Y)

VAR (V1): Intention to purchase (IP)

Purchase intention is defined in the marketing dictionary as the posibility that a consumer will buy a certain product resulting from the interaction of his need, attitude towards it and perceptions of the product and its producer. Other theories describe it to be a series of choices made by a consumer prior to making a purchase that begins once the consumer has established a willingness to buy (Dodds et al, 1991)

Independent Variable (X)

IN-VAR (X1): Perceived Quality (PQ)

Perceived quality is the consumer’s judgment about a product’s overall excellence or superiority (Zeithaml 1988). Perceived quality is an intangible multi factorial concept that represents the overall feeling towards a brand or product.

IN-VAR (X2): Country of origin (COO)

Country-of-origin is the country in which the producer product or brand is made (Saeed, 1994). COO image is the consumer’s perception towards the country’s representative products or brands. (Roth and Romeo, 1992)

IN-VAR (X3): Merchandising (SM)

Merchandising means the variety of products (number, category and type) available for sale and the assortment or display of those products in an attractive way to stimulate consumer’s interest and encourage them to buy. (Terrazas, 2006)

Thus merchandising in the research means product assortment, wobblers, occupied shelf space, shelf talkers and floor and counter displays.

IN-VAR (X4): Past Experience (PE)

It has long been argued that consideration of consumers past experience can provide predictions of his behavioral intentions (Conner and Armitage, 1998)

This past experience can be shaped by either personal testimonial or use of the product or by opinion of an influential reference group, family or friends.

IN-VAR (X5): Brand Image (BI)

Brand image can be defined as the idea of a specific product that consumers connect with, it aims for a cognitive top of mind conception of certain criteria about the product which the brand provides by identifying the name, logo, slogan, or design of the company who owns the idea.

Consumers form images about product cues and use these images as basis for judgment in future evaluations. (Erikson et al., 1984)

Moderating Variables (Z)

MOD-VAR (Z1): Pharmacist Opinion

The term pharmacist in this research will be referred to anyone inside the pharmacy who is in charge of the cosmetic section inside the pharmacy and in direct contact with the consumer either he/she was pharmacist, cosmetic man or pharmacy manager.

MOD-VAR (Z2): Demographics

Demographics are important factor when doing the market segmentation and targeting of specific customer. It includes the consumer’s age, gender, education level, and income level (Kotler P. & Armstrong, 2001).

Research Assumptions

The following are the assumptions that the researcher made in this research:

A1: There is a good pharmacy based (OTC) market for Dermo-cosmetics in Egypt

A2: The researcher assumes that relationship exists between the model’s dependent variable (IP) and the independent variables (PQ, COO, SM, PE and BI), proven by multiple scholars (Levy and Gendel-Guterman, 2012; Suki, 2011; Dodds et al, 1991; Churchill and Peter, 1998)

A3: The researcher assumes that only class A, B and maximum C+ customers can afford to buy dermo-cosmetics

A4: The researcher assumes that the OTC dermo-cosmetic market is present mainly in the class A and B pharmacies

Research Limitations

L1: Research is limited to Cairo only for questionnaire data collection and time constrains

L2: The theoretical framework is only limited to the variables included in the conceptual model including the perceived quality, country of origin, merchandising, past experience and brand image.

L3: the research questionnaire will be limited to the customers inside pharmacy premises

L4: The research will be limited to class A and B pharmacies where there are high traffic of

consumers and good OTC market

L5: Findings and results will be limited to the dermo-cosmetics in pharmacies only

research questions

Major Research Question

MjRQ1: What are the factors which affect the consumer purchase decision towards dermo-cosmetic products in Egypt?

By answering this question the researcher should be able to provide companies in the dermo-cosmetic business with information about the factors which affects the consumer purchase decision and thus they should direct their investment in the best way to improves the decision to their favor

Minor Research Question

The minor research question will test the relationships which are in the form of hypothesis formulated by the researcher in the suggested research model for the factors which affect the consumer purchase intention for dermo-cosmetics in Egypt

MRQ1: To what extent does the consumer perceived quality about a dermo-cosmetic brand affects his intention to purchase this brand?

MRQ2: To what extent does the country of origin of certain dermo-cosmetic brand affects his intention to purchase this brand?

MRQ3: To what extent does the Merchandising (product assortment, visuals, position and display) affects consumer intention to purchase certain dermo-cosmetic brand?

MRQ4: To what extent does the consumer past experience with a dermo-cosmetic brand affects his intention to purchase this brand again?

MRQ5: To what extent does the image of a brand of dermo-cosmetic affects consumer intention to purchase this brand?

MRQ6: Is the relationship between the consumer’s past experience, product perceived quality, country of origin, merchandising, product image and the consumer intention to purchase the product/brand affected by pharmacist opinion?

MRQ7: Is the relationship between the consumer’s past experience, product perceived quality, country of origin, merchandising, product image and the consumer intention to purchase the product/brand affected by consumer demographics?

research Methodology

Research Type

This research is of analytical nature as it aims at defining the key factors affecting the consumer’s intention to purchase dermo-cosmetics in Egypt. The research lies in the quantitative paradigm as it will collect and analyze numerical data through structured questionnaire producing quantitative data; however as a secondary source of data in the form of qualitative interviews with experts is also used. The research will use a large sample size due to the large size of the population under study. The research is deductive as it uses literature based hypotheses and intends to test global variables among Egyptian customers

Finally the researcher will use a questionnaire to gather statistical information as well as face to face interviews with experts in the dermo-cosmetic market as a secondary source of information.

Sampling Methods

The researcher used two sampling populations for the data collection

Population 1

Judgmental sampling using semi-structured face to face interviews with experts in the dermo-cosmetic business in Egypt to collect qualitative data and was able to interview 4 experts in this context

Population 2

Non probability sampling method was used and according to sekaran (2003), the sample size should be in this case 384 at least as the target for this research is huge population

The researcher actually conducted 440 questionnaire of which 407 questionnaire were completed while the rest had incomplete data so the researcher depended on the 407 complete questionnaires in doing the analysis for the research.

The questionnaire was conducted inside about 15 pharmacies in Cairo and Giza areas

Data Analysis Methods

The data analysis for the research had two phases.

The first phase was the analysis of the four expert interviews which helped in adding the moderating factors to the model under search and confirmed the validity and importance of other independent variables.

The second phase was the analysis of the quantitative data resulted from the questionnaire using both the descriptive and the inferential analysis

The researcher at first performed a demographic analysis to show the sample distribution across different model variables, and then a Cronbach Alpha in the reliability test was done to check the consistency of each set of questions measuring the same variable. Then the model question data were described using descriptive statistics including the median, mode, minimum, maximum and frequency distribution and then the variables were statistically described including their minimum, maximum, mean and standard deviation.

The researcher started the inferential analysis by the normality test to examine the distribution and decide which type of test to be used parametric or non-parametric.

The researcher then used Sperman correlation test to examine the relationship between each one independent variable and the dependent variable and assess the strength of the relationship in addition to its direction.

Moderating variables were then tested using Mann-Whitney test to examine the impact of the gender on the other dimensions, and then Kruskal-Wallis test was done for age, education level, income level and pharmacist opinion.

Linear regression test was then done to group all the independent variables into one equation to test their impact on the dependent variable.

thesis structure

this research consists of five chapters; the first one represents an overview about the subject and gives an idea about the whole study including the objective, assumptions, limitations, research questions and the suggested framework of the research and its type together with the techniques of the sampling and data analysis.

Chapter two will provide the literature review about the subject with details about the consumer purchase decision process and gives idea about the developing of cognitive models for purchase intention with previous researchable models and its variables, then will present three worldwide cases for the consumer purchase intention related in particular to the dermo-cosmetic products then presenting the current situation in Egypt.

Chapter three will provide deep analysis of the conceptual framework of the research with its different variables and its methodology

Chapter four will provide the statistical analysis of the thesis both descriptive and inferential and will test the hypotheses.

Chapter five will give conclusion of the study together with recommendations for the dermo-cosmetics industry stakeholders as well as recommendations for future work.

 

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