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Consumer Behaviour: Estee Lauder

In: Business and Management

Submitted By SobleSSed
Words 3298
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1.0 Introduction
Many companies at different levels strive to achieve a positive attitude towards their organizations, companies such as Coca Cola, Estee Lauder Companies Incorporation (Estee Lauder) and many others. Estee Lauder is a globally recognized manufacturer and marketer of prestige skin care, makeup, and fragrance and hair care products. Estee Lauder founded the Estee Lauder Company in 1946 and it’s headquarter is located in Midtown, New York. Estee Lauder comprises of popular brands such as Estee Lauder, Clinique, MAC Cosmetics and many others.
According to Estee Lauder (2011), the purpose of Advance Night Repair (ANR), is it frees skin from the visible accumulation of excessive damage and helps dramatically boost skin's natural ability to repair the visible effects of this accumulation and restoring skin of past damage. 1.1 Consumer Behavior Models
‘Consumer behavior reflects the totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, activities, experiences, people and idea by (human) decision-making units (overtime),’ (Hoyer and Macinnis, 2008, p.3). Consumer behavior toward a brand influence their purchase which can be shown through the Hierarchy of Effects Models (see Figure 1.1) propose that consumers become aware of, learn about a brand, develop an attitude towards it, a desire to purchase it which then leads to trial and adoption or rejection. Title: Hierarchy of Effects Models
Purchase

Think
Do
Figure 1.1 showing hierarchy of models
Conviction

Liking
Preference
Feel

Knowledge

Awareness

Source: http://www.marketingsavant.com/2009/06/marketing-classics-the-hierarchy-of-effects/
However, the ways that Estee Lauder uses consumer behavior models to create a positive attitude towards Advance Night Repair through the marketing mix would be examined using the Decision Making Process (DMP) model (refer to Figure 1.2) used by customer’s when making a purchase. Title: Decision Making Process (DMP) Figure 1.2 showing the DMP
Need Recognition & Problem Awareness Information Search

Evaluation of Alternatives

Purchase

Post Purchase

Source: http://tutor2u.net/business/marketing/buying_decision_process.asp 1.2 Target Market
In order to effectively generate positive attitudes, Estee Lauder must first identify who they are targeting for Advance Night Repair (see Table1.1). Title: Estee Lauder’s Advance Night Repair Target Market
Table 1.1 showing target market of Advance Night Repair Geographic | Over 140 countries such as Trinidad and Tobago, United States, United Kingdom. | Demographic | Women, Age ( 30 and above) | Psychographic/ Behavioural | Upper Class | Source: Student (2010)

2.0 Step 1: Need Recognition At need recognition stage, there will be gradual or immediate, realization, for a particular need or problem by potential consumer for a product or service. The need might be simple and caused by external or internal stimuli. Lauder has to be able to create awareness and interest for the product by creating exposure.
Estee Lauder advertises in upscale advertising mediums such as Vogue magazine to serve as cues to help position the product, reinforce quality to their target market and to create a need by external stimuli.

Estee Lauder triggers the arousal of the need by influencing the desired state. For example, the advertisement in upscale magazines such as Vogue in the year 2000, comprised of a popular model Liz Hurley, mesomorph, according to the body type theory (Sheldon 1898-1977, cited in Wright, 2006) which influence public perception of physical attractiveness. Also, it appealed to the super ego identified by Freud (1856-1939 cited in Solomon, 2010) by using the model. This helps acquire attention of the target market through the sense of sight which according to Rice (1993), which in turn influence consumer behavior. It affiliates the model with the product creating celebrity influence. Also, the model is in black and white and the product alone is in colour which demands attention generating arousal through stimulus properties (Loudon & Bitta, 1993) from customers by creating contrast via surprising stimuli.

The advertisement communicated functional consequence, greater & younger looking skin, psychological consequence, getting close to people and values, contentment and great future using the means-end chain analysis, (Gutman, 1982 cited in Blyth, 2008), which generated generic need recognition and created interest for the product. The advertisement is positioned at the middle of upscale magazine and has tag line “good night, good morning, great future” which appeals to the social need according to Maslow’s Hierarchy of Needs (1942 cited in Waterman and Ramsingh, 1999) (see Figure 1.3) of the consumer. Whereas, it appeals to the emotional identified by Plato’s divide soul, (Wright 1999 cited in Wright 2006) (see Figure 1.4) and serves as an antecedent to increase involvement, according to involvement theory (Evans, Moutinho, Raaij,1996). This motivates consumer by projecting in their minds an image of desired state and leads the customer through the other stages.

Figure 1.3 showing Maslow’s Hierarchy of needs

Source: http://thestamp.umd.edu/GH/basic_needs/index.html

Title: Plato’s divided soul

Figure 1.4 showing Plato’s divided soul
Highest level of thought

The ‘head’

The ‘heart’

The ‘gut’

Lowest level of thought

Source: Plato’s Divided Soul (Wright 1999 cited in Wright, 2006, p.214)

Since magazines are high involvement media, it grabs attention of the customers and motivates them by stimulating emotions, where approx 75% of all products are purchased for emotional reasons, according to (Solomon, et al., 2010).

The advertisement created awareness of wrinkles and aging skin and provided a solution forming a positive attitude toward brand by illustrating the utilitarian function according to functional theory of attitudes (Katz, 1960 cited in Baker 1992), which states attitudes are formed once the product serves a purpose.

According to Estee Lauder (2011), their vision is ‘Bringing the best to everyone we touch.’ Therefore, they appeal to consumers by the senses of touch and sight by offering sampling in unique, elegant methods to create interest to their product, such as the ‘Night to repair’ at Bloomingdale’s departmental store at New York City. Bloomingdale’s invited all their customers for one night to receive a 10 day supply of the product. This encourages purchase according to Rice (1993), where causality, the environment, motivated customer to purchase. The location was effective as Bloomingdale’s is a premier departmental store and famous for its upscale store in serving the Manhattan area where they cater to an upscale, trendy crowd. The store was designed with only Estee Lauder products and stalls were in the store with professionally dressed salespersons which created a perception of quality of service.
The in-store glass boxes with the product and DNA glass symbol making use of semiotics. The sales people were also friendly which promoted the brand image. Since the process of acquiring a sample was easy, along with a lavished atmosphere and location and unique display of the product, surrounded by friendly employees giving demonstrations, this gave the customers a perception of high quality of the product and service which all together leads to a positive attitude toward brand according to Gestalt theory (Berkman, Lindquist, Sirgy, 1997.)The situation or event created a need in the consumer’s mind by redefining the way the consumers perceived themselves.

3.0 Step 2: Information search
The consumer is then motivated to fulfill that high intensity need, so they carry out information search. Information could be located from many sources, internal and external, personal and impersonal, such as reference groups: celebrity endorsement, memory, learning from past experience or packaging. ‘Word of mouth’ and other customer recommendation are more valued than others.
The packaging of the Advance Night Repair is a dark brown bottle with Estee Lauder calligraphy with gold lettering with elegant cursive creating an icon. The logo and the packaging differentiate it from other brands, therefore, the perception of quality and elegance is greatly portrayed which grabs the attention of the customer. Gold represents status, prestige (Eiseman, 1998). Through symbolic stimuli creates the perception of quality. The packaging also provides product facts and how to apply the product. The package is manufactured in a way that it creates stimulus discrimination compared to competitors. Estee Lauder has a strong brand name with perception of high quality and via product line extension; perception of quality is expected from ADR.
Information of the product’s function is stated in the magazine advertisement, providing information to the customer. Through repeated magazine advertisement, internal search and memory is developed through right brain learning theory of passive processing (Schieffman & Kanuk , 2004) of the product which are stored for later retrieval. This view is also supported by Pavlov (1849-1936 cited in Hannah and Woznaik, 2001), where he stated repetition increases strength of association between model, conditional stimulus and brand, unconditional stimulus. Whereas Freud (1856-1939 cited in Lantos, 2011), suggested that repetition creates memory in subconscious. Also, the use of aspiration group, Liz Hurley, learning is developed through modeling or observational learning (Schieffman & Kanuk, 2004). This type of learning occurs through peripheral routes to persuasion for customers who are less motivated to exert cognitive effort. Since the model is reputable and well known, customer form a positive attitude towards the product according to the balance theory (Heider, 1958 cited in Wright, 2006). This is also known as the ‘balancing act’ where the star’s popularity will transfer to ANR and helps in the retrieval of memory, according to cognitive learning principles.
Estee Lauder recognized the growth of online shoppers and created a webpage of superior quality with advantage of offering customers a flexible and personalized relationship. Personalization has shown to increase level of loyalty a customer hold towards an organization, according to (Senecal and Nantel, 2004). Their website gives information such as the science behind the product which provides knowledge to the rational purchasers, the ‘head’, in Plato’s divided soul (Wright, 2006). The knowledge function is being satisfied according to Katz (1960 cited in Solomon, et al., 2010), functional theory of attitudes, which generates a positive attitude toward the brand. Katz proposed that once a function is satisfied, attitude formed would be satisfactory. It also contains testimonials of women who used the product from different parts of the world that can serve as noteworthy impersonal independent information source.
Consumers who are browsing can also be exposed through attractive in-store at these locations such at Bloomingdale’s, Macy’s, and Saks stores. The locations are all upscale areas to enhance brand image to their customers and serve as cues to give the perception of high quality according to Wright, (2006). These exclusive locations also run unique promotion which all grabs the attention of the customer. For example, ‘Night of Repair,’ all information pertaining to the product was in a brochure. Sales person also answered questions by customers and one-to-one attention were given to customers who generated quality service which leads to positive attitudes according to conceptual model of behavioral and financial service quality (Zeithaml, Berry and Parasuraman 1996). Senecal and Nantel (2004) discovered that personalize relationship leads to favourable attitude. Also through sampling, Estee Lauder provided haptic information (information related to touch), which helps develop long term memory for the brand and develop heuristics according to the cognitive model (Solomon, et al., 2010).
This stage creates awareness and interest. The methods of Estee Lauder in this stage all give a perception of quality. Therefore, favourable attitude is formed according to Gestalt theory (Wright, 2006) who found that perception help form attitudes.

4.0 Step 3: Evaluation of alternatives
After the customer need for the product is aroused and information is gathered. The customer then searches out their options to seek out the best option.

Since Estee Lauder is a well trusted brand, Advance Night Repair becomes part of the customer’s consideration set via product line extension according to stimulus generalization of the brand. Strong brand name gives perception of quality which forms beliefs in the consumer’s mind which forms positive attitude according to Multi-attribute attitude models (Blackwell, Miniard and Engel, 2006). Belief produces positive attitudes according to the standard learning hierarchy model, ABC of attitudes, (Solomon, 2010). Advanced Night repair is a high-priced product gives the perception of quality via price-quality relationship according to Solomon, et al., (2010). The product ingredients and formula facts such as dermatologist-tested, ophthalmologist-tested, fragrance-free and non acnegenic appeals to the consumer by reducing perceived risks and offering more attributes than competitors which forms a positive attitude, according to Fishbein’s Multiattribute Attitude Model (Blackwell, Miniard and Engel, 2006). However, the attitude-toward-object model (Scheider & Kanuk, 2004) suggests that the favourable attitude is formed because of the strong brand name.

The product is available through many user- friendly distribution channels such as specialty retailers, selected department outlets, company’s spa and internet with ease of access. The website offers the same prices to customer at all different parts of the world which promote fairness in the consumer minds according to the equity theory (Wright 2006) and is a form of direct marketing and provides ‘flow experience.’ The website also has a live chat and processes to give the best advice on products that best suit the customer’s skin which is the “subjective norm” component according to the theory of planned action (Solomon, 2010). Furthermore, the recommender system helps customers to choose the product that they need. All these components personalize the relationship with Estee Lauder which in turn encourages satisfaction according to (Senecal and Nantel, 2004). Ease of buying and availability to the customers makes it a well known brand among the target market and forms a positive attitude according to the attitude-toward-object model (Schieder & Kanuk, 2006). This also generated a pleasant emotion according to affect control theory (Wright, 2006) which states that events create emotion. Favourable emotion generates positive attitude according to ABC model (Solomon et al., 2010).
Through makeup artist an event, Estee Lauder provides opportunities for women to receive a personal consultation from professionals in selected retail stores which could satisfy the “social norm” component according to theory of planned action (Ajzan, 2005). Through event such as ‘Night of repair’ promotion, customers get an idea of the product by allowing using it which forms positive attitudes according to the theory of trying (Solomon, 2010). It also satisfies the cognitive component of the tri-component model (Solomon, 2010) which supports that it forms a promising attitude. Also the situation factor, the event, was a success that the memory of the whole experience would create a long term memory via the sensory store. This created memory for retrieval.
Estee Lauder pioneered 'Gift with Purchase' as a sampling program and believes that the quality and perceived benefits of sample products have been effective inducements in selling products to existing and new customers. Customers perceive added value when incentives are offered and develop a positive attitude via importance weight according to Fishbein’s Multiattribute Attitude Model (Hannah and Macinnis, 2008). Reward and punishment theory (Thorndike, cited in Wright 2006) supported this, where through sales promotion and additional incentives, consumers perceive rewards and value.

5.0 Step 4: Action and purchase decision
The end response of satisfying the need results in purchase. After evaluation, customers choose the best option according to the theory of reasoned action (Solomon, et al.,2010). In the process to purchasing the product, the sales person serve as a positive reinforcer, they encourage the customer to buy. Lauder places high importance in customer service. Therefore, employees are well trained and reinforce the quality of the product. This serves as high importance where customer forms a positive attitude toward brand. Persuade customer to buy by giving the customer advice and facts about the product and develop favourable attitudes, according to conceptual model of behavioral and financial service quality (Zeithaml, Berry and Parasuraman 1996). This states that quality service forms favourable attitudes. The ease of purchasing online along with the benefit such as free standard shipping with every purchase of $50, free gift wrapping and gift-with-purchase. Customers would perceive additional value because Estee Lauder uses free gift and the gift-with-purchase techniques. This motivated consumers to purchase according to Expectancy Theory (Vroom, 1964 cited in Hannagan, 2005). This is where the perceived value and expectation of product satisfaction are increase. Additionally, according to Economic Needs Motivation Theory (Taylor, 1856-1915, cited in Evans, Moutinho and Raaji, 1996), consumers are motivated to purchase by emphasizing ‘value’ to customers. This form positive attitude according to reward and punishment theory (Thorndike, cited in Wright 2006). This implies incentives signals reward to customer which all develop a favourable attitude towards the brand. Memory of past experiences with the product such as “Night to Repair,” would be retrieved, according to elaborate rehearsal (Wright, 2006), influenced the consumer to purchase. Purchasing the product showed that positive attitude was formed according to the theory of planned behaviour (Ajzen, 2005). This stated that positive attitude would lead customer to purchase of the product.

6.0 Step 5: Post-purchase evaluation
After purchase, the customer is either satisfied or not. Satisfaction leads to repeat purchase and brand loyalty. Brand loyalty results from the positive reinforcement of previous actions and is a favorable attitude toward and consistent purchase of a single brand over time.
Favourable attitude were form according to the tricomponent model (Solomon, et al., 2010) where three components formed an attitude which are belief, feeling and behaviour. Belief was formed in many ways through the stages need recognition and information search such as through celebrity endorsement and sales representative. Feelings toward the product were develop such as feeling beautiful and contented through the magazine advertisement. The consumer behaviour was purchasing the product. These elements were all led to a favourable attitude.
Customer satisfaction occurred through fulfilling the need of the customer by improving skin, reducing wrinkles which fulfilled the utilitarian function of the functional theory of attitude (Katz, 1960 cited in Scheiffman and Kanuk, 2006) which suggest that favourable attitude would be formed, once a function is fulfilled. Furthermore, according to the theory of trying (Solomon, et al., 2010), positive attitudes were formed since favourable results occurred through trying along with the trial and error (Thorndike, cited in Wright 2006).Trial of the product proved that the product reduces visibility of wrinkles , is absorbs easily in the skin and have no smell, free samples along with free gift the attitude formed is positive via rewards and punishment theory (Thorndike, cited in Wright, 2006) where customers have perceived they have received rewards. Hence, favourable attitude is formed. Through cognitive learning theory (Schieffman & Kanuk, 2006), satisfactory attitudes were developed, by learning of the product and fulfillment of the use of the product which is to reduce wrinkles.
Through satisfaction of fulfilling need, customer develops favourable attitude toward ADR and repeats purchase, according to operant conditioning of behavior model (Skinner, cited in Solomon et al., 2010), where the environment, extravagant environment of store such as Bloomingdale’s, classy packaging along with benefits such as samples, all reinforce satisfaction through rewards to the customer. This is learnt behavior and stored in consumer memory which encourages repetition of the product according to behavioural learning (Loudon and Bitta, 1993). Furthermore, Estee Lauder reduces customer dissonance by having a total cost refund if not satisfied, through in-store demonstrations and pleasant and helpful salesperson which ensures satisfaction according to Kotler & Armstrong (2006). 7.0 Conclusion
In conclusion, Estee Lauder generates positive attitudes at each stage of the consumer’s decision making process by appealing to their emotion, behavior and thought process through perception, memory and learning. ANR satisfy many functions such as utilitarian which also led to favourable attitude. Estee Lauder structures their marketing mix to attract and create interest in their target market (see Table 1.1).Positive attitude led to satisfaction and encouraged brand loyalty.
Therefore, by the use of consumer behavior models and theories in their marketing mix, Estee Lauder generated positive attitudes.

Word Count: 3000 words

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