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Cross Cultural Consumer Behaviour

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Contents
1. Introduction2
2. Culture2 2.1 L’Oréal in China: Product line 2.1.1 Product line: Facial Skin Care………………………………………………………….2 2.1.2 Product line: Skin Whitening……………………………………………....................3 2.2 L’Oréal in the USA: Product line 2.2.1 Product line: Eyes Makeup……………………………………………………………..4 2.2.2 Product line: Skin Tanned……………………………………………………………....5 2.3 Comparison and analysis………………………………………………………………………..6 2.4 Improvements and recommendations…………………………………………………….8
3. Perception…………………………………………………………………………………………………..9 3.1 TV advertisement in China: New L’Oréal Paris shampoo……………………….10 3.2 Perceptions of customers 3.2.1 Vision Perception…………………………………………………………………………13 3.2.2 Sound Perception…………………………………………………………………………14 3.3 Improvements and recommendations…………………………………………………..14
4. Conclusion………………………………………………………………………………………………...15 References………………………………………………………………………………………………...16

1. Introduction |
L’Oréal, which started as a hair coloring business by a French chemist, Eugène Schueller, was established in 1909. By following the guideline, “innovation in the field of beauty ”, L’Oréal has now perceived by worldwide as a multidimensional brand in terms of beauty products. Aside from hair coloring products, the company stretches its product range to make up, skin care, hair care and fragrances. Nowadays, L’Oréal sells its products in approximate 130 countries across five continents (Braizaz, 2014). Cultural learning and product adaptation have become the priorities for the company to successfully earn its brand recognition in the global market. Moreover, the perception of customers is another influencing issue that affects consumer behavior, which is worthy to be discussed.
This report will firstly focus on L’Oréal’s marketing activities through product variety between China and the USA. It is then followed by how the perception of customers influences the TV advertisement of L’Oréal in China. Both of the sections will contain the analysis and recommendations to make improvements. 2. Culture |
“Culture is the fundamental determinant of a person’s wants and behavior.” (Kotler and Keller, 2013, p.173) Since, culture differences influence people to display a variety of preference. Product variety is one of the marketing mix, which offers customers to have various choices to fit their preference. According to Fisher et al. (1994, cited in Bowman and Kogut, 1995), a company with a wide variety of products can pull customers compared to those rivals with narrower product lines. This section will discuss how culture variation affects L’Oréal to launch distinct product lines in different countries. 3.1 L’Oréal in China: Product line
2.1.1 Product line: Facial skincare
Yue Sai, a local Chinese skincare brand, has been a successful brand with its traditional Chinese medicine skincare products in Chinese beauty market. In order to effectively adapt into China, L’Oréal chose to acquire Yue Sai when it first expanded to China in 2004. In order to practice its motto, innovation in “all kinds of beauty”, L’Oréal has been increasing its research on the ingredients and Chinese skin (L’Oréal, 2014). The company established Shanghai Research and Innovation Centre to combines traditional Chinese medicine and western technical skills to produce the unique skincare products, which are tailored for the skin types of Chinese (L’Oréal, 2014). (Figure 1)
Cordyceps (A genus of fungi)
Cordyceps (A genus of fungi)
Angelica
Angelica
Fungus
Fungus
Figure 1: The product line of facial skincare in Yue Sai focuses on the special ingredients, traditional Chinese medicine, to fit the skin types of Chinese.

(Adapted from Yue Sai Website, 2014)

2.1.2 Product line: Skin Whitening
L’Oréal creates a particular product line of skin whitening in Asian market, called “White Perfect” (Mire, 2010) (Figure 2) The company promotes the products with slogans such as, “White skin gives you confidence." "Be a white bright star, people will focus on you!" "White Sensation." The usage of the language persuades Chinese women to spend more on skin whitening products to bleach their skin tones. This product line has made success, as L’Oréal’s annual profits of skin whitening products in 2010 were estimated over $1 billion in China (Bagley, 2012).

Figure 2

White Perfect Series

Skin Whitening products series
Skin Whitening products series

(Adapted from L’Oréal China Website, 2014)

3.2 L’Oréal in the USA: Product line
The USA has been a large market in beauty industry for a long history, and it was the first country L’Oréal decided to reach for more profits. (Braizaz, 2014) As makeup section has maintained the fastest growth in American market, L’Oréal focuses on makeups to be accustomed to this country. (Figure 3) Through the acquisition of local beauty brands, such as Maybelline New York and NYX cosmetics, the company has so far successfully accelerated its expansion in the USA. Moreover, in order to fit the market needs, in L’Oréal established the New Jersey Research and Innovation Centre to help refine and invent products. (L’Oréal, 2014) 3.3.1 Product line: Eyes Makeup
Maybelline New York, first famous with its eyes makeup products, was acquired by L’Oréal in 1996. The acquisition has assisted L’Oréal to start the business with fewer burdens in the new market. As most American females consider eyes as the center of charm, L’Oréal focuses on launching eye shadows and a series of mascaras with a variety of benefits to meet the requirements of customers.
Figure 3: L’Oréal USA, Growth by Product Category in 2011

(Adapted from L’Oréal USA Finance Report, 2012)

3.3.2 Product line: Skin Tanned
The tanning culture is considered to be the fashion trend in American society, as people tend to reach less pale complexion and the sun kissed shine on skin (Palmer, 2012). Due to the market needs, L’Oréal launches skin tanning products to add warmth and glow to the skin for Americans’ tastes. (Figure 4)

Figure 4

(Adapted from L’Oréal USA Website, 2014) 3.3 Comparison and analysis
Due to cultural variation, L’Oréal conducts certain strategies to these two countries: | China | The USA | Similar management strategies | Acquires foreign companies in the host countries to quickly adapt into the local culture. | | Establishes Research and Innovation Centre in the host countries to increase its research on the target markets. | Different marketing activities:Product lineVariation | Facial skincare products(Traditional Chinese medicine) | Eyes Makeup products(Variety of eye colors) | | Skin whitening products(Aesthetics of Chinese culture) | Skin tanned products(Aesthetics of western culture) |
In the above table, it is clear that L’Oréal has the similar expanding strategies through acquisition of its foreign competitors in each country (Braizaz, 2014). To enter Chinese market and the USA market, it purchased Yue Sai and Maybelline. This core strategy affects its marketing activities in products. Aside from expanding the market, the company is as well broadening its product variety. Another similarity is establishing research and innovation centers in both countries to adhere to its principle, “innovation in all kinds of beauty.”
The significant differences between two countries can be seen in the product line. L’Oréal centers skin care and skin whitening products in Chinese market, while focuses more on eyes makeup and skin tanned products in the USA market. The following passage will be discussing the theories and concepts, which influence the differences.
Compared to tanned skin, which refers to lower class in traditional Chinese culture, “fair skin” has been a symbol of high social status in long Chinese history. Hofstede (1994) indicated the power distance in China is relatively large, so that people tend to consume for social status. This result influences the importance of facial skincare and skin whitening among Chinese, as people in this culture are likely to magnify their social power through appearances. Therefore, it is appropriate for L’Oréal to focus on skin whitening products in Chinese market. Another concept behind the marketing activities used in China could be referred to “acculturation” (Usunier and Lee, 2009). According to Solomon (2013), it is important for marketers to notice this issue to successfully adapt into various cultures in the global society. In order to bond a firm relation with Chinese culture, L’Oréal implements assimilation strategy by discarding western preference for tanned skin and concentrating on the product line of skin whitening. Moreover, the company acquires the host culture through enhancing research on traditional Chinese medicines as ingredients of skincare products to fit Chinese culture.
In contrast with easterners, westerners own the variety of eye colors. It is concerned to be the origin that westerners show much care about the beauty of eyes. Therefore, it forms the dramatic eyes makeup culture in the USA to brighten the eyes. In the USA market, L’Oréal makes a good decision to invent products on eyes makeup. For instance, it owns a rich collection of eye shadows with various colors (Figure 5), and divides single mascara category into assorted sectors in terms of benefits. (Figure 6)

Figure 5

(Adapted from L’Oréal USA Website, 2014)
Figure 6: Rich collection of mascara with different benefits

(Adapted from L’Oréal USA Website, 2014)
2.4 Improvements and recommendations
Aside from those appropriate decisions L’Oréal have made, there are certain activities can be improved for the company in terms of product line.
Chinese culture values natural beauty. However, it is etiquette to wear makeup in special occasions. Thus, instead of heavy foundations and dramatic eyes makeups, naked makeup products that well display the purity of facial skin are recommended to grow Chinese market. Moreover, since having white skin has always been rooted in Chinese culture, adding whitening effect in the products can be beneficial, as Hofstede (1994) pointed out the consuming behavior is severely connected with social status in China. Thus, the combination of naked makeup and whitening effect is suggested for the product line to boost Chinese market.
Another recommendation is the combination of benefits in eyes makeups, especially mascaras in the USA market. Although L’Oréal owns an ample benefit in mascara category (Figure 6), it sometimes can confuse customers while purchasing in the store. According to Hall’s (1983) theory on the cultural context, the USA is the culture with low context, which means that Americans believe time is valuable and they avoid ambiguity that wastes time. It is recommended to conduct marketing research to discover the most wanted benefits of mascara among American customers. For instance, if the result shows long lasting and easily removing as the most wanted benefits of mascara, L’Oréal can combine those benefits to the whole mascara product line. This can lessen customers’ purchasing time while choosing the product, as the customers know those most wanted benefits have become “general and basic benefits” in the mascara product line of L’Oréal. They can focus on other key benefits without concerning if the product owns the “most wanted benefits”. Moreover, due to the cultural tastes change, organic products are recently becoming popular within American market. Therefore, creating a natural and organic makeup product line might be another good choice. 3. Perception |
People are exposed in a world surrounded by various information and stimulation through images, sound, smells, tastes and touches, which are detected by sensory receptions. According to Solomon (2013), perception is the basic process to adopt, arrange and interpret these sensory stimuli that people receive. (Figure 7) Through perception, people transform the raw sensations into meaningful concepts and then make choices. Personal perception is considered as one of the most important elements to influence the purchasing process (Kokoi, 2011). In order to effectively affect customers’ purchasing decisions, marketers manipulate external stimulus to appeal customers’ sensations. Recently, sensory marketing has become a significant strategy for marketers to draw customers’ perception via commercial messages (Solomon, 2013). This section will discuss how perception is considered to affect people to buy L’Oréal products in China through TV advertisement.
Figure 7: The perceptual Process

(Adapted from Solomon, 2013) 4.4 TV advertisement in China: New L’Oréal Paris shampoo
Length: 30 seconds 1. It starts with a famous Chinese actress with beautiful hair asking, “Need a reason to change your shampoo?”

2. “I will give you five reasons.” 3. “Dry, frizzy and dull…”

4. “Brittle and with split ends.” 5. “It fights all five hair problems.” 6. For the first time, the advertisement shows the product, “New L’Oréal Paris multi-repair 5.” 7. It contains micro protein essence that repairs deeply and precisely to your hair. 8. It eliminates dryness, frizz, dullness, brittleness and the split ends of your hair. 9. Not only restoring strength but also adding shine to your hair. 10. “Get rid of five problems with only one solution.” 11. Display the product once again and emphasize the name, New L’Oréal Paris multi-repair 5.

12. At the end, the actress repeats the renowned slogan of L’Oréal, “Because you are worth it.”
(Source: Youtube, 2014)

4.5 Perceptions of customers
Through the advertisement, vision and sound are the major perceptions. The following section will be examining how the advertisement affects these two perceptions. 4.6.3 Vision Perception
Vision perception is estimated to dominate approximately 80 percent of what people receive from the environment (Hanna and Wozniak, 2013). Compared to the advertisements without support of celebrities, those with famous spokespersons or experts can be more confirming, as customers might bond a sense of sacredness between the celebrity and the product. In this L’Oréal advertisement, it is appropriate to select Fan Bing Bing, the famous Chinese actress, to demonstrate the product. With several times of displaying her long, rich hair and gorgeous appearance, customers may pay more attention on the product she is demonstrating. This can as well be linked to the Peircean Semiotics Triad. Fan Bing Bing is perceived as a sexy icon (sign) to most Chinese people, and L’Oréal combines the actress and the product (object) to structure the appealing impression (interpretant) in customers’ mind. The usage of signs is the method that marketers conduct to enhance the product image. (Figure 8) Moreover, according to Solomon (2013), colors are another elements to affect the emotions and perceptions of customers more than expected. In the advertisement, the background color is gold, which represents nobility and honor in China. It can form a strong connection between the product and premium quality to Chinese customers. In addition, it constantly displays the brand name in the advertisement, which can repetitively remind customers of the brand, L’Oréal. It could have a positive effect to those potential customers while making decisions for purchasing the product, as they might connect the product with high brand equity.

Figure 8: Peircean Semiotics Triad

(Adapted from Chang, 2007) 4.6.4 Sound Perception
According to Hoyer and Macinnis (2009), the slogan could evoke the positive emotional influence on people. The subliminal message behind the slogan might enhance the purchasing attitude of customers. The memorable slogan of L’Oréal, “Because you are worth it,” is repeated at the end in each advertisement. China is a relatively masculine society, through this slogan, the company creates a guide to encourage Chinese women to obtain the rights for beauty. Another influencing part in the advertisement is the background music. Music plays a significant role to impact people’s emotions, which can affect consumer behavior. (Solomon, 2013) In line with premium quality of the product that is expressed in the advertisement, L’Oréal chooses the music with strong beat and intriguing melody to imitate the background music on catwalk. It displays a sense of fashion and the ambiance of modern, which might be a good choice for inducing customers. 4.6 Improvements and recommendations
For the improvement on visual perception, it is confirming to have a celebrity to display the product. However, if L’Oréal could add the content that shows the comparisons of before and after using the product, the advertisement might be more realistic to customers. In addition, a picture is considered to be more remarkable for memory than words, and it can contain enough information in a single image (Oates and Reder, 2011). Thus, instead of emphasizing the informative details displayed through words, more colorful pictures are recommended to show in the advertisement, as customers can retrieve the benefits of the product from memory more easily.
As for sound perception, though the background music in this advertisement is appropriate as has been discussed before, it could be improved more. According to Solomon (2013), audio watermarking is an effective method to penetrate into people’s mind and makes the subliminal message more compulsive. Therefore, it is recommended that L’Oréal can compose its theme music in the advertisement. Not only repetitive slogans can enhance the positive perception, the memorable theme music could also make people recall the ambiance they feel for the advertisement. Moreover, the argument from Kotler and Keller (2013) agrees that the subliminal perception is indeed influencing consumer behavior, even without being consciously noticed. 4. Conclusion |
This essay aims to examine how culture and perceptions of customers influence L’Oréal on implementing particular marketing activities in different countries.
Firstly, it discussed the various product lines launched in China and in America. Due to cultural differences, L’Oréal creates a brand of innovating ethnic and multicultural beauty. It centers on skin whitening and facial skin care products in Chinese market, whereas focuses on skin tanned products and eyes makeups in America. By analyzing the marketing activities implemented in the two countries, it is proved that culture is one of the influencing factors to affect consumer behavior.
The other aspect has been discussed is the perception of customers. In this section, it examined how subliminal perception can influence purchasing decision. Through the advertisement, marketers express messages to intrigue vision and sound perceptions of customers. After all, to constantly attract customers and raise the market share volumes are always the important issues to every business.

References |
Braizaz, M. (2014) L’Oréal: a success story in international marketing to women (online) Available from: http://www.womenology.com/sectors/beauty-toiletries/loreal-a-success-story-in-international-marketing-to-women/
(Accessed 17 November 2014)

Bagley, S. (2012) Ethnic Skin Whitening (online) Available from: http://susanbagleydotme.wordpress.com/tag/loreal-china/ (Accessed 20 November 2014)

Bowman, E. and Kogut, B. (1995) Redesigning the firm. Oxford: Oxford University Press

Chang, H.L. (2007) Semiotics (online) Available from: http://csmt.uchicago.edu/glossary2004/semiotics.htm (Accessed 05 December 2014)

Hall, E.T. (1983) The dance of life: The other dimension of time. New York: Doubleday

Hanna, N. and Woznial, R. (2013) Consumer Behaviour: An Applied Approach, 4th edition. US: Kendall Hunt Pub Co

Hoyer, W.D. and Macinnis, D.J. (2009) Consumer Behaviour, 5th edition. USA: South Western, Cengage Learning

Hofstede, G. (1994) Cultures And Organisations: Software of the Mind (The Successful Stategist). UK: Profile Books

Kotler, P. and Keller, K.L. (2013) Marketing Management 14th edition. England: Pearson Education Limited

Kokoi, I. (2011) Female Buying Behaviour Related to Facial Skin care Products. Lambert Academic Publishing |
L’Oréal (2014) (online) Available from: http://www.loreal.com/Finance.aspx?topcode=CorpTopic_Secondary_Medias_FinanceNews&id=969 (Accessed 23 November 2014)
L’Oréal (2012) L’Oréal USA International Financial Analysts (online) Available from: http://www.loreal-finance.com/_docs/fichiers_contenu/0000000662/INVESTOR_DAYS_MAY_2012_F_ROZE.pdf (Accessed 24 November 2014)

Mire, A. (2010) Pigmentation and Empire (online) Available from: http://thenewblackmagazine.com/view.aspx?index=2382 (Accessed 23 November 2014)

Solomon, M. (2013) Consumer Behavior: Buying, Having and Being, 10th edition. England: Pearson Education Limited
Oates, J.M. and Reder, L.M. (2011) Memory for pictures: Sometimes a picture is not worth a single word (online) Available from: http://memory.psy.cmu.edu/publications/10Oates_Reder.pdf
(Accessed 07 December 2014)
Palmer, B. (2012) When Did Tanned Skin Become Fashionable (online) Available from: http://www.slate.com/articles/news_and_politics/explainer/2012/10/romney_s_spray_tan_when_did_white_people_start_deliberately_tanning_themselves.html
(Accessed 23 November 2014)

Usunier, J.C. and Lee, J.A. (2009) Marketing Across Cultures, 5th edition. USA: Financial Times, Prentice Hall

Youtube (2014) Fan Bingbing L'Oreal 'Five reasons' via Mumbrella commercial (online) Available from: https://www.youtube.com/watch?v=Q4zsUCiE11s‬‬‬
(Accessed 30 November 2014)

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