An Empirical study on Factors Influencing Purchase Decision of L'oreal Paris

Cosmetic Products in Pune City

1Prof.Nanda Das, 2Dr.Vaibhav Patil, 3Dr.Ganesh Waghmare

1Assistant Professor, Sri Balaji University Pune‘s Balaji Institute of International Business, Pune, (Maharashtra), India

2Assistant Professor, Sri Balaji University Pune‘s Balaji Institute of Management and Human Resource Development, Pune, (Maharashtra), India

3Assistant Professor, Sri Balaji University Pune‘s Balaji Institute of Management and Human Resource Development, Pune, (Maharashtra), India

Abstract:

The market size of the cosmetics industry in India is estimated to be worth more than US$ 6 billion

out of global market of USD 274 billion. Market is expected to register annual growth of 25 per cent

touching USD 20 billion by 2025. The study is carried out to find out factor influencing Purchase

Decision of customers of L'Oreal Paris cosmetic products. Research was exploratory in

nature. Research was carried out in Pune city. Population was divided into

representative areas, representative hundred sample size decided and responses were

collected. simple percentage analysis, frequency, cross-tab graph, charts were used for simple data

analysis & factor analysis, Chi square, & regression SPSS test were used for the hypothesis

testing Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount

have significant influence on the buying decision of customers of Loreal paris products. TV

advertisement and social media were the major source of information. Makeup segment and skin

care segment had major customers. Products related to face fairness and skin care air were in major

demand. Customers are satisfied with the products and services of L'Oreal Paris. Majority of the

customer has good experience with the quality of the L'Oreal Paris products and would like to

recommend to others.

Keywords: L'Oreal Paris, cosmetics, Beauty products, Brand image, Price, Professional

consultation, Skincare products, Purchase Decision.

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 326

Introduction:-

In 1907, a young French chemist Eugéne Schueller developed an innovative colour formula which

further became ingradients for Loreal paris products. In 1909, He registered his own company Loreal

Paris. L'Oréal S.A. is a French Paris based personal care company. It has it’s headquarter in Clichy,

Hauts-de-Seine. It has registered office in Paris. It is one of the world's

largest cosmetics manufacturing company and has various product lines comprising concentrating

on hair colour, skin care, sun protection, make-up, perfume, and hair care. Brands are diversified into

targeted markets, such as the mass, professional, luxury, and active cosmetics markets. L'Oréal also

owns interests in various activities such as fine chemicals, health, finance, design, advertising, and

insurance. Loreal paris is selling their products in 130 countries. Loreal paris has 64,600 employees.

L’Oreal set up its wholly-owned subsidiary for marketing its consumer products in India in 1994.

L’Oreal has set up its own manufacturing plant in Pune.

Cosmetics industries in India:-

The market size of the cosmetics industry in India is estimated to be worth more than US$ 6 billion

out of global market of USD 274 billion. Market is expected to register annual growth of 25 per cent

touching USD 20 billion by 2025. The Indian cosmetic industry's growth is twice as fast as that of

the United States or Europe. 65% teenagers in India, their expenditure on branded cosmetics have

increased 75% in the past 10 years. India imports cosmetics, beauty products worth $400 US$

million per year

Major Driving Factors of Indian Cosmetic Industry:-

1) Increased Disposable income and purchasing power.

2) Increased rising fashion consciousness.

3) Increased levels of cosmetics brand advertising.

4) Increased imagination and awareness for Cosmetic products.

5) The better paying jobs of women have resulted in higher spending power of women.

6) Impressions created by Indian film industry on the youth

7) Importance of grooming and being fashionable

8) The changing aesthetical mindset towards luxurious approach to expenditure.

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 327

Brand value of the leading personal care brands worldwide in 2019(in million U.S.

dollars)

Source (Statista, Jul 3, 2019)

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 328

Review Of Literature:-

Anjana S S (2018)

The purpose of this paper is to figure out the attributes that affect the consumer’s consumption for

cosmetic products. Through this study, it was identified that the five factors, quality product, product

price, brand name, product packaging and advertising have greater impact on customer buying

decision. Consumers go through the rigorous thought processing making their buying decisions, since

there are alternative products which compete in the areas close proximity, relatively cheaper price,

quality, etc.

A,H.Hemanth Kumar et al. (2014)

After analysis we found that small differences exist in the income level that implies the different

groups prefer or opinion differs on consumer buying behavior. It created a curiosity to us to find out

which group really differing on the opinions. By the help of Post hoc we found out that the dependent

differ the opinion among other class. It may be due to the decisions taken by youngsters. Every

person plays multiple roles in their daily life, professional role or social role.

Research study of Guthriem et al. (2008) found that there is correlation between women's

perception of brand personality and women's facial image and cosmetic uses. It was found that

different brand personality characteristics influenced friend attitude for or different Cosmetic

products

K. Rama Mohan Rao et al. (1991)

The study revealed that the impact of advertisements on consumer behavior as well as the purchase

decision process is significant. The consumers are satisfied with the quality of advertisements also.

The consumers expressed their serious concern on exploitation of women in advertisements.

Anand Deshmukh (2015)

Most of the people (65%) prefer to use domestic brand.

Most of the people (60%) like to buy organic cosmetic product.

Almost 50% people get to know cosmetic product through television

Most of the people (65%) prefer to use domestic brand.

Most of the people (60%) like to buy organic cosmetic product.

Almost 50% people get to know cosmetic product through television

Customers while making cosmetics purchase prefers to use domestic brand, like to buy organic

cosmetic product & Customers get to know cosmetic product through television. It is also

concluded that customers remain loyal to their cosmetic products, they don’t change their

cosmetic brand.

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 329

Objective

To study factor influencing Purchase Decision of customers of L'Oreal Paris cosmetic beauty

products

Hypotheses

There is significant relationship between Brand image and Buying decision

There is significant relationship between Celebrity Endorsement and Buying decision

There is significant relationship between Quality and Buying decision

There is significant relationship between Price and Buying decision

There is significant relationship between Convenience and Buying decision

There is significant relationship between Professional consultation and Buying decision

There is significant relationship between Availability and Buying decision

There is significant relationship between Discount and Buying decision

RESEARCH METHODOLOGY:-

The research is exploratory in nature

Sample size:-

Hundred samples has been taken from Pune city

Sample is good representative of all age group, income groups, occupation groups, and Demographic

characteristics.

Sampling method:-

Convenient sampling method was used to collect data

Primary data collected from 100 respondents.

Data Has been collected through structure Questionnaire with the help of multiple option close ended

questions.

Pune city was divided into east west and South North region and from each region 25 respondents

were collected having good representation of population of Pune city

Data Analysis Tools

Two types of statistical tools used one is simple statistical tools and SPSS software.

Simple Statistical tools: - Percentage, Frequency, Mean,

etc. were used for the analysis.

SPSS software tools: - Chi square, Regression and Factor Analysis

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 330

Reliability Test:

Reliability Testing: Cronbach's Alpha is designed as a measure of internal consistency of items in

the questionnaire. Reliability was tested using Cronbach's Alpha and it found excellent having

.902.

Data Analysis and Interpretation:-

The above graph shows that majority of the respondents 33% belong to 25 to 31 age group

followed by 18 to 24 age group 32%, followed by 32 to 38 age group 18%

From the above graph it can be seen that majority of the respondents are doing private job 34%

followed by housewife 30% followed by government job 18% and business is the least observed

occupation

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 331

The above graph shows that TV Advertisement 26% was the major source of information for or

L'Oreal Paris beauty products followed by social media 20% followed by friends and family 18%

followed by word of mouth 16% followed by print advertisement 8%

In case of pattern of usage of products by the respondents, majority of respondents are

using L'Oreal Paris products since last one year 29%, followed by in between 1 and 2

year 28%, followed by 2 year -3 year 18%, followed by more than three years 15%

The graph shows that makeup segment it was the major product segment used by respondents

36%, followed by skin care segment 31% followed by fragrance segment 16% followed by Hair Care

segment 10%

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 332

Above graph shows that L'Oreal Paris product related to face was majorly used by 27% of the

respondent, followed by skin care 26%, eyes products 16%, followed by lips products 12%

followed by nail enamel 9%

Above graph shows that frequency of buying products - majority of the respondents said that they

are buying L'Oreal Paris products frequently 31%, followed by very frequently buying pattern

28%, followed by somewhat 20%, followed by rarelly 17%

The above graph shows that majority of the customers are bi products worth below 1000 rupees per

month 31%, followed by 1000 to 1500 rupees group, 29%, 1500 to 2000 rupees group, 21%, and

above 2000 rupees group ,19 %

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 333

From the above graph it can be seen that majority of the customers has bought L'Oreal Paris beauty

products from General Stores 31%, followed by malls 23%, followed by online shopping platforms

21% followed by Departmental Store 16%

Regarding satisfaction of the customers L'Oreal Paris beauty products majority of the customers are

highly satisfied 42%, followed by satisfied customers 27%, followed by dissatisfied customer 14%,

followed by neutral customer 9%

Regarding L'Oreal Paris beauty products recommendation by the customers to other

people, majority of the customers will strongly agree 38%, followed by, 29%

will recommend, followed by neutral 15%, followed by 12% which will not recommend

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 334

Regarding the quality of the L'Oreal Paris beauty products 45 percent of the customer reported

that the products are best, followed by 27% says it is better, followed by 15% sad it's good, Ud

followed by 7% said bad quality

Reliability

Reliability Statistics

Cronbach's

Alpha

N of

Items

.902 15

Item-Total Statistics

Scale Mean if

Item Deleted

Scale Variance

if Item Deleted

Corrected Item-

Total

Correlation

Cronbach's

Alpha if Item

Deleted

Overall Experience 56.4200 131.741 .329 .904

Advertisement 56.4800 129.060 .401 .902

Price 55.9900 132.636 .696 .899

Offers 55.9900 136.212 .357 .904

Value for Money 56.1200 136.066 .229 .906

Warranty period 56.1300 135.225 .332 .904

Quality 57.1900 108.721 .863 .883

Discount 55.9900 132.010 .756 .898

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 335

Convenience 57.3900 107.230 .826 .885

Availability 57.3900 107.412 .820 .886

Brand image 57.3900 103.695 .939 .879

Variety 55.9900 132.697 .690 .899

Brand Performance 56.2600 138.861 .031 .911

Celebrity Endorsements 57.4100 105.355 .894 .882

Professional Consultation 57.3800 109.127 .857 .884

Factor Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .887

Bartlett's Test of Sphericity Approx. Chi-Square 1279.785

df 91

Sig. .000

Communalities

Initial Extraction

Advertisement 1.000 .649

Price 1.000 .813

Offers 1.000 .731

Value for Money 1.000 .486

Warranty period 1.000 .638

Quality 1.000 .848

discount 1.000 .751

Convenience 1.000 .811

availability 1.000 .787

Brand image 1.000 .910

Variety 1.000 .693

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 336

Brand Performance 1.000 .425

Celebrity Endorsements 1.000 .860

Professional Consultation 1.000 .810

Total Variance Explained

Component

Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 7.338 52.413 52.413 7.338 52.413 52.413

2 1.834 13.101 65.514 1.834 13.101 65.514

3 1.042 7.440 72.954 1.042 7.440 72.954

4 .918 6.557 79.511

5 .724 5.173 84.684

6 .532 3.803 88.488

7 .478 3.417 91.905

8 .331 2.362 94.268

9 .315 2.250 96.518

10 .163 1.161 97.679

11 .130 .927 98.606

12 .101 .721 99.327

13 .055 .393 99.720

14 .039 .280 100.000

Component Matrixa

Component

1 2 3

Advertisement .355 .130 .712

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 337

Price .808 -.374 -.146

Offers .461 -.718 .057

Value for Money .239 .646 -.107

Warranty period .366 .566 -.429

Quality .914 -.108 -.014

Discount .847 -.182 -.041

Convenience .889 -.146 -.012

Availability .850 .244 .075

Brand image .954 -.008 .025

Variety .744 .350 -.133

Brand Performance .018 .395 .519

Celebrity Endorsements .906 .143 .136

Professional Consultation .898 .013 -.047

On the basis of factor analysis following variables those have high value in communalities table taken

for the study further and applied chi-square crosstab to prove validity and reliability of the hypothesis

the following hypothesis are proven

Factor Analysis :- Interpretation

Factor analysis was carried out for the following variables

Brand image, Celebrity endorsement, Quality, Price, Convenience, Professional

consultation, Availability and Discount.

After factor analysis results those have high value in communalities table taken for the study

further Chi square test is applied on these variables

Following results were observed After applying chi-square test we observed following results P value for brand image is 0.01 which is less than 0.05, so we reject null hypothesis and accept

alternate hypothesis P value for celebrity endorsement is 0.027 which is less than 0.05, so we reject null hypothesis and

accept alternate hypothesis P value for quality is 0.026 which is less than 0.05, so we reject null hypothesis and accept alternate

hypothesis P value for price is 0.026 which is less than 0.05, so we reject null hypothesis and accept alternate

hypothesis P value for professional consultation 0.037 which is less than 0.05, so we reject null hypothesis and

accept alternate hypothesis

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 338

P value for professional availability 0.005 which is less than 0.05 so we reject null hypothesis and

accept alternate hypothesis P value for professional discount 0.008 which is less than 0.05 so we reject null hypothesis and

accept alternate hypothesis

Sr.No. Hypothesis Communalities

extraction

values

Pearson Chi-

square value

Status

1 There is significant relationship between

Brand image and Buying decision .910 .001 Alternate

Accepted

2 There is significant relationship between

Celebrity Endorsement and Buying

decision

.860 .027 Alternate

Accepted

3 There is significant relationship between

Quality and Buying decision .848 .002 Alternate

Accepted

4 There is significant relationship between

Price and Buying decision .813 .026 Alternate

Accepted

5 There is significant relationship between

Convenience and Buying decision .811 .026 Alternate

Accepted

6 There is significant relationship between

Professional consultation and Buying

decision

.810 .037 Alternate

Accepted

7 There is significant relationship between

Availability and Buying decision .787 .005 Alternate

Accepted

8 There is significant relationship between

Discount and Buying decision .751 .008 Alternate

Accepted

Findings:-

1) Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount

have p value 0.01, 0.027, 0.02, 0.026, 0.026, 0.037, 0.05, 0.008 respectively which are less

than significant level 0.05 so these variables influence the buying decision of customers of

Loreal paris products positively.

2) TV Advertisement 26% & social media 20% was the major source of information for or

L'Oreal Paris beauty products

3) Majority of respondents 29%, are using L'Oreal Paris products since last one year

4) The makeup segment 36% & skin care segment 31% were the major product segment used

by respondents

5) Product related to face 27% & skin care 26%, were majorly used by L'Oreal Paris

customers

6) Majority of the respondents are buying L'Oreal Paris products frequently 59 %

7) Majority of the customers 50%, buy products worth below 1500 rupees.

8) Majority of the customers has bought L'Oreal Paris beauty products from General Stores 31%

& malls 23%.

9) Majority 69% of the customers are satisfied

10) 67% of the customers will recommend L'Oreal Paris beauty products to other people.

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 339

11) Overall quality of L'Oreal Paris beauty products is better as reported by the 72 percent of the

customer.

Suggestions:-

1) Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount

should be given preference while making marketing strategy of Loreal paris products

2) It is Suggested Loreal Paris Brand should prefer TV Advertisement social media for their

promotions.

3) Brand should focus more on the makeup segment & skin care segment

4) Brand should focus more on Product related to face & skin care

5) Brand should make available at all the outlets General Stores & malls

6) Brand should develop maximum beauty product range below 1500 rupees per month usage.

7) Brand should use CRM to maintain satisfaction level high against competitors

8) Brand should use maintain overall Quality level high against competitors

Conclusion:-

Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount

have significant influence on the buying decision of customers of Loreal paris products

TV Advertisement social media were the major source of information.

The makeup segment & skin care segment were the major product segment used by

respondents

Product related to face & skin care are in major demand frequency of buying in L'Oreal

Paris products seen more than ordinary unbranded beauty products

Mostly people purchase cosmetics below 1500 rupees.

General Stores & malls are the preferred places to buy the loreal paris products

Customers are satisfied with the brand Loreal Paris

Customers will recommend the brand Loreal Paris to others.

Overall quality of L'Oreal Paris beauty products is better than most of the competitors

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 340

References:-

1. Anand Deshmukh et al. July 2015, "Consumer Buying Behavior towards Cosmetic Products",

https://www.researchgate.net/, ISSN: 2321-1784 , Vol.03 Issue-07, (July, 2015)

https://www.researchgate.net/publication/338421485_Consumer_Buying_Behavior_towards_Cosmetic_Produ

cts

2. Anjana S S, A study on factors influencing cosmetic buying behavior of consumers, International Journal of

Pure and Applied Mathematics, Volume 118 No. 9 2018, Page - 453-459, ISSN: 1311-8080,

https://acadpubl.eu/jsi/2018-118-7-9/articles/9/40.pdf

3. A,H.Hemanth Kumar (2014), A Study on factors influencing consumer buying behavior in cosmetic

Products, International Journal of Scientific and Rsearch Publications, Volume 4, Issue 9, pp 1-6

https://pdfs.semanticscholar.org/3bdd/7989aa024263e8192646024b2baa63c300e2.pdf

4. K. Rama Mohan Rao, Impact Of Advertisements On Consumer Decision Making Process ,

http://www.publishingindia.com/GetBrochure.aspx?query=UERGQnJvY2h1cmVzfC8xMzE2LnBkZnwvMT

MxNi5wZGY=

5. Michelle Guthrie (2007), The effects of facial image andcosmetic usage on perceptions ofbrand

personality,www.researchgate.net, pp -164-181

https://www.researchgate.net/publication/235287807_The_effects_of_facial_image_and_cosmetic_usage_on_

perceptions_of_brand_personality

6. A. P. H. Y. S. Prof. Sema Behdioglu, "Determining of the effect of cosmetic product labels on purchasing

process using logistic regression analysis," International Journal of

Business and Management Review, vol. 2, no. 4, pp. 80-103,2014.

7. ]T. Dr. S.Anandarajan, "Consumer purchase decision behaviour towards cosmetics marketing," Asia Pacific

Journal of Research, vol. 1, pp. 144-149, 2016

8. H. A. H. T. Dr. Vahidreza Mirabi, "A Study of Factors Affecting on Customers Purchase Intention," Journal

of Multidisciplinary Engineering Science and Technology, pp.

1-7, 2015

9. D. M. J. C. Dr.P.Susai manickam, "TV advertisement of cosmetics and the buying behaviour of college

going girls in selected cities of Tamil nadu," Intercontinental journal of

marketing research review ISSN:2321-0346, pp. 1-7, 2016.

10. D. D. K. S. Prof. Siddharth Shriram Shimpi, "A factor analysis on product attributes for Consumer buying

behavior of male cosmetics in Pune City," International

Journal in Multidisciplinary and Academic Research, vol. 2, no. 2, pp. 1-21, 2012

Mukt Shabd Journal

Volume IX, Issue VIII, AUGUST/2020

ISSN NO : 2347-3150

Page No : 341