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ISSN: 2047-2528 Vol. 1 No. 4 [99-113]

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ANALYZING THE INFLUENCE OF PROMOTION MIX ON INCREASE OF SALE IN

COSMETICS AND BEAUTY PRODUCTS

(THE CASE STUDY OF ATOUSA HAIR COLOR)

Dr. Mirza Hasan Hosseini

Assistant Professor, Head of Business Administration

Department University of Payam-e Noor, Tehran, Iran

E-mail: Ir_ [email protected]

Mohsen Safaie navaie M.S. in Executive management University

of Payam-e Noor, Babol, Iran

E-mail: [email protected]

ABSTRACT

In today's world, existence and development of organizations and companies depend on proper marketing and selling products and services. Today's marketing is not based on producing facilities but rather on providing appropriate information channels for the consumers. Successful companies must identify proper ways of persuading customers in order to preserve their situation in market share and competitiveness. In cosmetics industry, we deal with a market progressing rapidly, but the interesting fact is that the share of domestic manufacturers is declining along with the decrease in their sales. Review of the literature shows that no investigations have been done the subject of the mentioned market and proper ways of persuading consumers in our country Iran. Hence, in order to study proper ways of informing consumers, questionnaires were distributed among 384 women who used Atousa at least

once. The questionnaires contained question on the subject of the influence of promotion mix tools on increase of sales. Research result show that personal selling, sales promotion and advertising were the most influential factors in increase of hair color sale. But direct marketing had less significant effect on increase sale of this product.

Key words: promotion mix, sales promotion, advertising, personal selling, direct marketing

INTRODUCTION

In all marketing processes, marketers try to infuse quality in the minds of customers in

order to provide with values around which repurchase and sales promotion shape up. Indeed, marketing seeks proper way of satisfying customers' demand at end of which

successful companies get distinguished from the unsuccessful ones.

Considering the use of cosmetics products by a vase range of families, it increases

competitiveness unconsciously. Besides, competition in cosmetics product industry involves especial condition due to short life cycle. According to Kumar (2006), the less life cycle, the

more competition gets; so rapid and on time sale is an essential factor for producers. In this

industry, some famous foreign producers preserve significant international market share for

years, but new competitors have influenced the share of these companies by producing

products fitting consumers' demands and wishes, proper price, new ways of presenting

products, enormous advertising, etc. Among these, Sabz Golsar cosmetics and beauty products company could gain relatively proper share in Iran's market due to high quality,


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proper price and also easy access but in recent years the company had faced decline in

sales. Since the quality has been improving and the price has remained the same, the

question is why some companies could preserve their market share while others have not been able to do so? This fact has made company's managers analyze the problem and

identify factors of success and failure. The implication drawn was that one of the factors

sounding vital and yet less attended is lack of proper attention to the marketing and relative

variables from the consumer point of view. Hence, significance of information tools and

persuading strategies should be investigated.

LITERATURE REVIEW

Promotion mix

Pheng low (1995) in defining promotion mix states, promotion involves any ways of

providing information and persuasion and reminding consumers of marketing mix of

products, goods or services. oh Hyunjoo (2009) believes promotion results in increase of

sales and profit and also develops the tendency toward the brand finally brings about increase in sales. Understanding consumers' reaction to promotion in supplying useful

approaches is very important both for increasing sales and other components of marketing

mix, because these factors are deeply interrelated; in fact components of sales promotion

can serve as significant factors in deriving consumers (Banerjee, 2009). In other words,

promotion consists of providing direct or indirect ways of communication with people,

groups or organizations in order to inform and persuade them on the way to purchase products and services (Rezvani, 2008). Promotion mix tools most applied in this industry

include: Sales promotion, advertising, personal selling and direct marketing

Sales promotion

Defining the term sales promotion is rather difficult for the presence of multiple relating

techniques and tactics and that sales promotion is a tool to achieve company's marketing communication objectives and an essential element in planning marketing (Blattberg,

1990). Sales promotion is a short term strategy to derive demand and also and especial

marketing offer which provides more profit than what consumers receive from the sale

position of a product and also has sharper influence on sales (Banerjee, 2009). This tool

has the ability to attract and keep loyal customers and is an excellent what to persuade

them build viable link with the organization and involves all motifs applied by the producer to persuade trade with members of a channel (Ndubisi, 2006). Among various tools of sales

promotion, four ( free sample, advertising gifts, coupon and discount) are investigated

which have more influence in cosmetics and beauty products industry.

Free sample

According to Ben Amor's researches (2009), during the last ten years, significance of free

sample as tools of promotion in the field of cosmetics has been on the rise. According to the

investigation done by Denly a marketing company, 75% the companies use free samples to

improve their products, whereas 52% of the companies don't advertise their new products.

Although representing this method is a powerful promotion tools, it requires high costs for

the organizations. Shoemaker and Bava(2004) state this tool is influential in cases which involve a lot of people not having used the product or even not willing to do so.

Giving advertising gifts

Proper gifts are one of the best ways to transfer the message that communication is

important. Oral communications are soon forgotten but gifts with company's mark on it act as a reminder and attract the customers (Fan, 2006). Indeed we can claim company's gifts

are a kind of investment in the business world. This method is based on interaction on

which presenting gift results in inducing the feeling of an obligation to make up for the

profit and paves the path for ongoing business (Beltramini, 2000).


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Offering coupon

Coupon has direct influence on increase of the sale through which consumers tendency toward the product increases (Meng, 2009). This is one of the oldest and yet most common

tools of promotion which has been applied since 1895 and during recent years has become

a known term for producers and retailers as a tool to encourage sale has been on the rise

and accepted to the consumers more than any other promotion method(Banerjee, 2009).

Discount

Discount play an important role in today's markets and its application among retailers has

been increasing during the last years and many emprical evidences confirm the use of

temporary decrease of price to increase short term sales (Martınez, 2006). Discount is a

technical tool for retailers to increase sales and profits and it should be presented in times

which the demand for products and services are high (e.g. in Christmas) (Oh Hyunjoo, 2009).

H1: Sales promotion has a positive influence on increase of the sales of hair color products.

Advertising

Advertising has been designed to direct views also make change in behavior easy and may

present the most convincing sale messages with most accurate perspective of products or

services without much cost (Celeb, 2007). Until 1989, advertising in eastern and central

Europe had carried a negative implication and been considered as a tool to spread

Capitalism, but gradually advertisement have been designed which had informative aspects and because of it's significance in informing upon new products and services it turned to be

generally accepted(Petrovici, 2007). Indeed advertisement is one of the primary

communication link with consumers, hence consumers' desired image and language along

with culture, economy and commercial changes should be kept in mind (Wang, 2009) and

in order to bring about the best influence, the message type should accord with the

product, that is logical messages are more useful for consumer products whereas emotional messages fit with value based and empirical products (Mortimer, 2008). If the content of the

message and the way it's represented convey association of an specific desired brand for

people, they get more information on it which results in positive reaction toward the

product (Praxmarer,2009). With respect to the variety of advertising media, three public

ones are studied which are most applied in this industry: television, radio and magazine

Television

With the burst of TV numbers, and variety of TV programs, the media is now considered as

the most useful information source for new products. Experts believe that TV has a long

term influence of an indirect and gradual nature but very important and incremental.

Radio

Since radio broadcast messages are delivered and received when driving or housekeeping,

understanding through radio is not perfect and listeners complete the message image with their own imagination. Imagination process is very important in radio since the audience

ponders upon the message and has their own interpretation (Khojasteh, 2002).

Magazine

Magazine industry has undergone dramatic changes in the world and these changes got into all dimensions of this industry. Although the nature of a magazine still remains

unchanged, the industry supporting it is in constant flow. The growth of advertisement in

magazines, the variety of contents and the advances made, prove this changing

environment (Mohamadian, 2009).


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H2: Advertising has a positive effect on sales of hair color product.

Personal Selling Personal selling is the executive wing of organizations to attract customers and increase

sale of products and services. All efforts in organizations' different departments result in the

performance of Personal selling(Azizi, 2009), since it is informed of the rival companies and

market changes sooner than other departments(Storbacka, 2009). In fact, they act as

private link between company and customer and from consumers' point of view represent

the company, bring value for it and so need information on the consumer (Moghareh Abed, 2009) and in order to be successful in sales process, having information on marketing,

financial issues and activities are essential (Storbacka, 2009). Trust between the seller and

the buyer is important which has been vastly discussed in marketing literature and

researches show that more trust results in more effective performance (Dawes, 2006).

H3: Personal selling has positive effect on sales of hair color

Direct Marketing

Direct Marketing Association defines Direct Marketing as follows: Direct Marketing is an

interactive marketing system which uses one or more advertising media to provide a

measurable reaction or trade in every level (Kutler, 2006). This represents a flexible method

which can deliver the message and target especial group of customers in an effective way

(Hayter, 2005). Direct Marketing is one of the most important elements of marketing mix in most successful companies. The more competition in market and customers surrounded by

messages and information on the products, the clearer boundaries of marketing

environment become and more potential channels for most traditional companies are

provided (Duffy, 2005).

Among various direct marketing methods, four main ones i.e. sale through catalogue, email, telephone and S.M.S are studied in the research.

Marketing with price list (catalogue)

Marketing with catalogue requires the company to post the catalogue to the customers or

providing access for them. The catalogue may be in form of a simple booklet or even

cassette and CDs. Indeed for some companies these booklets are replacements for

professional sellers.

Telemarketing

With telephone, a company tries to contact the customers directly and sell them it's

products. This method has become one of the primary tools in making direct marketing

communication.

Network Marketing

Network marketing through computer making mutual conection provides the consumer

with the possibility of contacting the seller with the use of electronic device.

Marketing through mobile phone

Mobile phones has increasingly become a communication device along with traditional

communication devices such as TV and even solely. It's application as a device to advertise

brand and derive customers' reaction is very important since it has the ability to identify customers and send especial contents in messages and it's expected that in near future

marketing through mobile phone will increase (Leppaniemi, 2008).

H4: Direct Marketing has positive effect on sales of hair color


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THEORY FRAMEWORK OF THE RESEARCH

With respect to the presented hypotheses, the conceptual pattern follows below:

RESEARCH METHOD

Population and sampling: Due to dispersal of cosmetic products consumers, the

population in this research consists of females from Karaj who has used Atousa hair color at least once. In order to have views of population, a questionnaire with Likert's five option

scale was distributed among 384 females buying Atousa hair color from four main selling

centers.

RESULTS

Demographic description of the research:

In order to study the demographic condition of the research, five questions were introduced; The average age of statistics sample was about 36 and the maximum usage belonged to 28

years old females; 25% of females were under 27; the remaining 25% were under 27; and

remaining 25% were 43. Other data are represented below.

Table 1: Demographic properties of statistical sample

Variable Levels Percent Variable Levels Percent

Usage

Very Low 25.3

Education

Below Diploma 8.3

Low 24.7 Diploma 32.8

Medium 29.2 College 23.7

High 12.2 Bachelor 3.26

Very High 8.6 Master and

Higher 8.9

Income

Less than 300000 toman 8.3

Job

University Student

17.4

Between 300000 to

400000 14.3 Householder 33.9

Between 400001 to

500000 22.4 Employee 26.6

Sales promotion

Advertising

Personal selling

Direct marketing

Increase of sale

H1

H4

H2

H3


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Between 500001 to

600000 25.5 Retired 5.7

More than 600000 29.4 Others 16.4

Numbers of indexes related to each element, along with reliability coefficient of any

component are shown in table 2; according to the results, all components are in

desired situation.

Table 2: Position indexes present in research's proposed model

Related Dimension Number of available

index in the model coefficient of alfa

Sales Promotion 7 0.850

Advertising 6 0.760

Personal Selling 6 0.731

Direct Marketing 6 0.785

Total component 25 0.856

RESEARCH FINDINGS

To test research hypotheses, T test was applied.

Table 3: Results of one- sample T test for proposed hypotheses of the research

Research

hypotheses

Test value = 6

N Mean

Std.

Deviation

Std.

Error

Mean

T Df P-value Mean

Difference

Hypothesis 1 384 3.68 0.85 0.043 15.66 383 000 0.68

Hypothesis 2 384 3.50 0.76 0.039 13.02 383 000 0.50

Hypothesis 3 384 3.91 0.67 0.034 27.02 383 000 0.91

Hypothesis 4 384 3.07 0.88 0.045 1.55 383 0.12 0.69

According to table 3, for three hypotheses related to advertising, sales promotion and personal selling statistics amount of the research were over 13 and as a result P-value is

almost zero. Thus all the three hypotheses are accepted. The only hypothesis related to

direct marketing element is meaningful in error level of 5% and P-value is over 0.05. In fact

advertising, sales promotion and personal selling have positive influence on sales of Atousa

hair color and direct marketing has no meaningful influence on increase of sales. To rate elements of promotion mix, Friedman test was used based on results of table 4, statistic

amount of the test is 57.694 and P-value is almost zero. Thus, from the individual point of

view in population, the significance of the elements differ.


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Table 4: Results of Friedman test for some related cases

P-Value Df Chi-square (χ2) N Friedman test

.000 2 57.694 384 Test Result

According to the results from table 5, personal selling has the highest rating followed by

sales promotion and finally advertising has the lowest rating.

Table 5: Rating of elements related to promotion mix

Desired Factor Priority Mean rank

Personal selling 1 2.26

Sales promotion 2 2.01

Advertising 3 1.73

Presenting a model for elements of promotion mix

In this section, validation of a proposed model in the research has been analyzed and

implications on the survey population have been drawn based on the samples collected and

with respect to the application of factor analysis in this research the Lisrel statistical software has been used.

The proposed model and hypotheses are shown in figure 1 and table 6; the research model

analyses the relationship between the research components and conceptualisation of the

research. In the analysis process of the research, first the whole validity of the model is

studied. Then, the interrelation of the components is analyzed to address the proposed

hypotheses.

Table 6: Proposed hypotheses for presenting the research model

Proposed hypothesis 1: There is meaningful relationship between advertising and sales

promotion

Proposed hypothesis 2: There is meaningful relationship between advertising and personal

selling

Proposed hypothesis 3: There is meaningful relationship between advertising and direct

marketing

Proposed hypothesis 4: There is meaningful relationship between sales promotion and

personal selling

Proposed hypothesis 5: There is meaningful relationship between sales promotion and direct

marketing

Proposed hypothesis 6: There is meaningful relationship between personal selling and direct

marketing


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Figure 1: Research's proposed model

RESEARCH'S GENERAL MODEL

In this section, our main goal is to address the question ' Is the model valuable in general?

'. To answer this question we can apply different criteria such as amount or . Figure

2 shows research's general model (including measuring model and structural model) which

specifies the relation of the index with it's related component in the measuring model and

also the relation of the components in the structural model along with their standard

influence coefficient. The criteria of general estimate for the proposed model can be seen in

table 7.

Figure 2: Research's general model based on standardized amounts

Statistics presented in table 7 has acceptable range and show that the model has proper

estimate because most of the accepted criteria such as NNFI amount and CFI are over 90%. Moreover the reliability coefficient in every component is represented extensively in table 7.

Advertising

H;3

Sales promotion

Direct marketing Personal selling

H;1

H;4

H;6

H;2 H;5

Q10.69

Q20.46

Q30.43

Q40.48

Q50.46

Q60.56

Q70.73

Q80.58

Q90.60

Q100.82

Q110.71

Q120.88

Q130.92

Q140.65

Q150.72

Q160.80

Q170.46

Q180.65

Q190.74

Q200.76

Q210.58

Q220.59

Q230.60

Q240.59

Q250.75

A 1.00

SP 1.00

PS 1.00

DM 1.00

Chi-Square=686.55, df=266, P-value=0.00000, RMSEA=0.064

0.56

0.73

0.75

0.72

0.73

0.66

0.52

0.65

0.63

0.42

0.53

0.34

0.29

0.59

0.53

0.44

0.73

0.59

0.51

0.49

0.65

0.64

0.63

0.64

0.50

: مدل کلي پژوهش براساس مقادير 2شکل

استاندارد شده

A

SP

D

M

PS


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Table 7: Indexes of estimate of research's general model

Statistic of the research's

proposed model Acceptance criterion Estimation index

X2=686.55

Df=266

χ2 ≤ 3df

χ2

(Chi Square)

2.581 3df

2 df

2

0.064 RMSEA ≤ 0.08 RMSEA

0.065 SRMR ≤ 0.10 SRMR

0.92 0.90 ≤ NNFI NNFI

0.93 0.90 ≤ CFI CFI

0.87 0.90 ≤ GFI GFI

0.85 0.85 ≤ AGFI AGFI

101 ≤ N (of sample)

N=200

Hoelter’s Critical N

Testing the proposed hypotheses in the research model

In general, in this section along with studying the validity of the research model, testing the

proposed hypotheses of the research is considered whose results are summarized in table 8:

Table 8: Position of relation of proposed component in the research's proposed model

Test amount

Hypothesis

test result the research model hypotheses

Correlation

coefficient

Significance

number

0.56 10.59 acceptance Proposed hypothesis 1: Advertising Sales

promotion

0.41 7.38 acceptance Proposed hypothesis 2: Advertising

Personal selling

0.32 5.31 acceptance Proposed hypothesis 3: Advertising Direct

marketing

0.44 7.01 acceptance Proposed hypothesis 4: sales promotion

Personal selling

0.55 9.43 acceptance Proposed hypothesis 5: sales promotion Direct

marketing

0.37 6.13 acceptance Proposed hypothesis 6: Personal selling Direct

marketing


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In order to obtain meaning, the number should be less or more than two. As a result, for

the entire hypothesis of the proposed model there were no evidence rejecting it, thus all

hypotheses were accepted. In fact, results of this section supports desired reliability of the components relating to the promotion mix of Atusa hair color product.

CONCLUSION

Promotion can be a powerful derive to persuade consumers and lead into increase of sales

and profits and make most of those who don't have the experience of the product try it at

least once. Testing of research hypotheses (one-sample T-test) showed that sale promotion,

advertising and personal selling are influential factors in increase of sales in hair color since they improve costumers' awareness and persuade them to try the product and these results

correspond to researches such as Banerjee (2009), Oh, Hyunjoo (2009), Petrovici (2007),

Wang (2009), Dawes (2006), Storbacka (2009), Moghareh Abed (2009), etc. But direct

marketing had no meaningful influence on inrease of the sale from the perspective of

individuals present in the population.

Moreover, using Friedman test, tools of promotion mix and components of every tool

influencing the increase of the sale were rated which shows personal selling stands above

all other components followed by sales promotion and advertising. Among sales promotion

tools, giving free sample stands above all components followed by giving advertising gifts,

coupons and discount.

Among advertising media, magazines are the most important to people followed by TV, radio.

LIMITATIONS

All researches face with limitation which also exist in this research. The most important

limitation in the research was unwillingness of the statistical sample to answer research

questions which make the effort time consuming and brings a 3 month delay to the research process. Another limitation was dispersion of centers selling cosmetic products

and also selection of some shops as main selling centers attracting more consumers.

SUGGESTIONS

Along with research results, some suggestions are presented below to increase sales of

Atousa hair color:

To introduce hair color using free small sample packages for consumers to try the product in a new useful way.

Giving advertising gifts with company's logo on it acts as a derive and reminder of the hair color product.

Providing experts and hairstylists with adequate information on the product in order to introduce Iranian products and motivation of the customers is very important.

Situational and seasonal discounts are useful ways to provide motivation to increase the sales.

Personal selling is the representative of the company and plays an important role in increasing sales of company's products. Thus, using experienced Sale force can act

as an influential factor.

Marketers play an important role in introducing the product and provide positive conception toward the product.

Since there is positive relation between promotion mix components in increasing sales, we can conclude that the outcome of promotion mix components are stronger

than every single component, so simultaneous application of all methods can bring

additional effect.


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SUGGESTIONS FOR FUTURE RESEARCHES

Studying the role and the significance of the marketing mix components (product, price and location) in increase of sales of hair color.

Studying role and significance of marketing mix in increase of sal of other products of Atusa.

Studying obstacles and difficulties in advertising beauty products in Iran and presenting approaches to overcome this limitation.

Presenting approaches to introduce beauty products to the market in affective way.

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ANNEX

Exibit 1: Demographic properties of statistical sample

Variable Levels Percent Variable Levels Percent

Usage

Very Low 25.3

Education

Below Diploma 8.3

Low 24.7 Diploma 32.8

Medium 29.2 College 23.7

High 12.2 Bachelor 3.26

Very High 8.6 Master and

Higher 8.9

Income

Less than 300000 toman 8.3

Job

University Student

17.4

Between 300000 to 400000 14.3 Householder 33.9

Between 400001 to 500000 22.4 Employee 26.6

Between 500001 to 600000 25.5 Retired 5.7

More than 600000 29.4 Others 16.4


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Exibit 2: Position indexes present in research's proposed model

Related Dimension Number of available

index in the model coefficient of alfa

Sales Promotion 7 0.850

Advertising 6 0.760

Personal Selling 6 0.731

Direct Marketing 6 0.785

Total component 25 0.856

Exibit 3: Results of one- sample T test for proposed hypotheses of the research

Research hypotheses

Test value = 6

N Mean

Std.

Deviation

Std.

Error Mean

T Df P-value Mean

Difference

Hypothesis 1 384 3.68 0.85 0.043 15.66 383 000 0.68

Hypothesis 2 384 3.50 0.76 0.039 13.02 383 000 0.50

Hypothesis 3 384 3.91 0.67 0.034 27.02 383 000 0.91

Hypothesis 4 384 3.07 0.88 0.045 1.55 383 0.12 0.69

Exibit 4: Results of Friedman test for some related cases

P-Value Df Chi-square (χ2) N Friedman test

.000 2 57.694 384 Test Result

Exibit 5: Rating of elements related to promotion mix

Desired Factor Priority Mean rank

Personal selling 1 2.26

Sales promotion 2 2.01

Advertising 3 1.73


ISSN: 2047-2528 Vol. 1 No. 4 [99-113]


Exibit 6: Proposed hypotheses for presenting the research model

Proposed hypothesis 1: There is meaningful relationship between advertising and sales

promotion Proposed hypothesis 2: There is meaningful relationship between advertising and personal

selling Proposed hypothesis 3: There is meaningful relationship between advertising and direct

marketing Proposed hypothesis 4: There is meaningful relationship between sales promotion and

personal selling Proposed hypothesis 5: There is meaningful relationship between sales promotion and direct

marketing Proposed hypothesis 6: There is meaningful relationship between personal selling and direct

marketing

Exibit 7: Research's proposed model

Exibit 8: Research's general model based on standardized amounts

Advertising

H;3

Sales promotion

Direct marketing Personal selling

H;1

H;4

H;6

H;2 H;5

Q10.69

Q20.46

Q30.43

Q40.48

Q50.46

Q60.56

Q70.73

Q80.58

Q90.60

Q100.82

Q110.71

Q120.88

Q130.92

Q140.65

Q150.72

Q160.80

Q170.46

Q180.65

Q190.74

Q200.76

Q210.58

Q220.59

Q230.60

Q240.59

Q250.75

A 1.00

SP 1.00

PS 1.00

DM 1.00

Chi-Square=686.55, df=266, P-value=0.00000, RMSEA=0.064

0.56

0.73

0.75

0.72

0.73

0.66

0.52

0.65

0.63

0.42

0.53

0.34

0.29

0.59

0.53

0.44

0.73

0.59

0.51

0.49

0.65

0.64

0.63

0.64

0.50

: مدل کلي پژوهش براساس مقادير 2شکل

استاندارد شده

A

SP

D

M

PS


ISSN: 2047-2528 Vol. 1 No. 4 [99-113]


Exibit 9: Indexes of estimate of research's general model

Statistic of the research's

proposed model Acceptance criterion Estimation index

X2=686.55

Df=266

χ2 ≤ 3df

χ2

(Chi Square)

2.581 3df

2 df

2

0.064 RMSEA ≤ 0.08 RMSEA

0.065 SRMR ≤ 0.10 SRMR

0.92 0.90 ≤ NNFI NNFI

0.93 0.90 ≤ CFI CFI

0.87 0.90 ≤ GFI GFI

0.85 0.85 ≤ AGFI AGFI

101 ≤ N (of sample)

N=200

Hoelter’s Critical N

Exibit 10: Position of relation of proposed component in the research's proposed model

Test amount

Hypothesis

test result the research model hypotheses

Correlation

coefficient

Significance

number

0.56 10.59 acceptance Proposed hypothesis 1: Advertising Sales

promotion

0.41 7.38 acceptance Proposed hypothesis 2: Advertising Personal

selling

0.32 5.31 acceptance Proposed hypothesis 3: Advertising Direct

marketing

0.44 7.01 acceptance Proposed hypothesis 4: sales promotion Personal

selling

0.55 9.43 acceptance Proposed hypothesis 5: sales promotion Direct

marketing

0.37 6.13 acceptance Proposed hypothesis 6: Personal selling Direct

marketing

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