ABC Company Ltd Marketing Research Report

Marketing Research Report for ABC Company Ltd.

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March 29, 2024

Marketing Research Report for ABC Company Ltd.

Part One

ABC Company Ltd contracted our firm to carry out a market research to inform a planned expansion into the United States (US) market, specifically the State of Hawaii. ABC Company has been in operation in the Canadian market for five years and deals in the production of a wide range of beauty products, from haircare, to lip care, make up, skin care, eye care, and chemical exfoliation. Having successfully created a strong customer base and market niche among quality-sensitive customers in Canada, the company wishes to expand into the US as part of its ten-year growth plan. The problem is that ABC’s top leadership is not sure that Hawaii would offer a feasible market for its products and what marketing strategies to use to ensure effective penetration. The research sought to help the company identify the most appropriate marketing strategy given the target market’s demographic profile, tastes, and preferences.

The research focused on four elements of the marketing mix: product, price, place, and promotion. The general objective was to identify the most appropriate marketing strategy for the company’s products in the Hawaiian market. The specific objectives were tied to the four elements of the marketing mix: i) To determine the most commonly consumed beauty products in the target market, ii) to identify feasible pricing strategies for the target market, iii) to determine where Hawaiian customers purchase their beauty products; and iv) to identify the most preferred advertising strategies among Hawaiian customers. The subsequent sections of this report outline the research design employed, the sampling procedures, the data collection methods, data analysis techniques, research findings, and policy recommendations.

Part Two

Hawaii’s Demographic Profile

Demographics are a crucial determinant of business strategy and success. They dictate fundamental business factors, including the nature of promotion factors, product packaging, and pricing (Babin et al., 2020). When a company’s marketing strategy aligns with the market’s demographics, sales are likely to increase (Babin et al., 2020). Data from the United States (US) Census Bureau places the total population in Hawaii at 1.4 million as at July 2022, where females comprise 49 percent of the population (US Census Bureau, 2022). The population is dominated by Asians, who make up 40 percent, followed by whites at 25 percent, and Pacific Islanders at 10.3 percent (US census Bureau, 2022). Approximately 55 percent of the population is aged between 18 and 64, and 92 percent are high school graduates, out of whom 34 percent are holders of a bachelor’s degree or higher qualification. In regard to income, data shows that only 10 percent of the population lives in poverty and the median household income stands at $98,414, which is significantly higher than the $74,580 national average (Guzman & Collar, 2023). Over 90 percent of households own a computer and 89 percent have internet access (US Census Bureau, 2022). At a glance, Hawaii provides a relatively attractive market for ABC’s products, which mainly target middle-aged customers who focus on looking good and are willing to pay a premium for quality beauty products.

Research Design

The research design outlines the plan of action for the research (Babin et al., 2020). The research adopted a descriptive research design, whose main focus is describing phenomena as they are, without establishing cause-and-effect relationships (Babin et al., 2020). Descriptive research designs are appropriate when the researcher’s aim is to answer questions around who, where, when, and what, and not to determine why phenomena are the way they are (Babin et al., 2020). The aim of the market research, in this case, was to determine what kind of beauty products align best with the Hawaiian market, where customers prefer to purchase their beauty products, and what advertising/pricing strategies appeal to the Hawaiian population. These aims make the descriptive design highly appropriate. The aim is simply to understand the consumer behavior of the Hawaiian market, and not to explain why customers in Hawaii behave like they do.

Type of Data and Data Collection Methods

The researchers collected primary data, which is data obtained for the first time directly from the field. Primary data was preferred for this research for several reasons. First, this was the first time the company was venturing into the US market, whose demographic characteristics differ from the Canadian market. As such, it was important to obtain the perspectives and ideas of potential customers directly from them. Secondly, the company’s range of beauty products is quite unique and hence, data collected by other researchers in the past may not effectively inform marketing decisions at ABC. At the same time, consumer tastes and preferences for beauty products are highly dynamic and hence, past data may not provide an accurate picture of current consumer behavior.

The researchers used a survey to collect the research data. The survey was developed and administered via the Google forms platform and could be accessed on any mobile device. It contained a set of closed-ended questions that took approximately ten minutes to complete. The survey was used to obtain answers on what beauty products are commonly used by Hawaiians, how frequently they make their purchases, where they prefer to buy their beauty products, their preferred advertising strategies, factors influencing their purchasing decisions, and their preferred pricing strategies. Since a majority of the population owns a smartphone, an online survey was more appropriate than a physical one because it allowed data collection from a large number of people at the same time and with minimal transportation costs.

Sampling Procedures

The survey was shared widely on various Hawaii residents’ social media clubs and groups across multiple platforms. All who wished to participate were allowed to do so as long as they submitted their responses within the set timelines. This process led to a final sample of 3,450 randomly-selected participants who took part in the survey. The main challenge was limiting the survey to Hawaiians only since everyone was allowed to share the link with their networks. To ensure objectivity, responses from non-Hawaiians were excluded from the analysis.

Data Analysis

Survey data was analyzed using frequency statistics, and graphs and tables were used to show the number of participants who chose each response in each question. The use of graphs and tables was preferred to other methods of presentation as these provided an at-a-glance view of the findings. Moreover, tables and graphs could be easily interpreted by anyone without requiring special expertise. Given that the research findings were to be disseminated to a highly diverse audience, it was important to present the research findings in a manner that is easy to interpret.

Market Research Findings

Table 1 below presents the frequency of participants’ survey responses on a question-by-question basis.

Table 1

Frequency of Survey Responses

Question

Option 1

Option 2

Option 3

Option 4

Other

What is your state of residence?

Hawaii

Other

Which of the following best describes your city of residence?

Urban

Rural

Semi-Urban

What is your gender?

Male

Female

Other

Are you a direct/indirect consumer of beauty products? (Direct – you use the products yourself; indirect – you purchase for a third party e.g. a spouse or family member)

Yes

No

What beauty products do you commonly consume?

Skin Care

Hair Care

Make up and Lip Care

Eye Care

Chemical Exfoliation

How frequently do you purchase beauty products?

Weekly

Monthly

Bi-Annually

Annually

Never

Have you had the opportunity to use any of ABC’s beauty products?

Yes

No

Only Heard a third party talking about it

What Qualities do you look for in a beauty product?

Price

Quality

Popularity

Reviews

Brand

Are you willing to pay more for a quality or well-known brand?

Yes

No

To what extent do discounts influence your purchasing behavior when it comes to beauty products?

Very Great Extent

Great Extent

Small Extent

Very Small Extent

Never

To what extent does price influence your purchasing decisions around beauty products?

Very great extent

Great Extent

Small Extent

Very Small Extent

Never

Where do you mostly purchase your beauty products?

Retail Outlets

Cosmetic Shops

Online

Other

Where do you mostly learn or obtain information about your beauty products?

Social media ads

Television and radio

Print Media (Magazines, newspaper ads, etc.)

Word of Mouth (Friends, Relatives, etc.)

Other

Figure 1

Interpretation: The figures indicate that females residing in urban areas are the greatest consumers of beauty products in Hawaii. Although males and rural residents present a smaller market, they are a potentially attractive niche for a new company to explore.

Recommendations: ABC needs to structure its marketing efforts to target females residing in the urban cities of Hawaii since these are the greatest consumers of beauty products. At the same time, the company needs to intensify sensitization campaigns on products that appeal specifically to male customers, such as beard care products, men body lotions, eye creams, and so on.

Figure 2

Interpretation: The most popular beauty products among Hawaiians are hair care, skin care, and make-up products. Notably, the demand for eye care and chemical exfoliation products among Hawaiians is significantly low. This could be due to lack of knowledge on the existence and importance of such products. The second graph shows that most customers prefer to make their purchases on a monthly basis in bulk.

Recommendations: ABC needs to focus most of its marketing efforts on hair care, skin care, and make-up products as these are more popular in the target market. There is also a need for marketing campaigns that sensitize customers on the importance of chemical exfoliation and eye care products to increase their usage rates. At the same time, ABC could increase its sales by offering more coupons, discounts, and advertising more at the end of each month, when most customers are planning their monthly purchases.

Figure 3

Interpretation: Consumers of beauty products in Hawaii mostly look at the quality of a product, its popularity, and the brand when making purchase decisions. Price is s secondary factor relative to these three, which is why customers are willing to pay more for their preferred brand or a costly product that meets quality standards. This indicates that Hawaiian customers are quality-sensitive rather than price-sensitive. This is beneficial given that ABC’s products are relatively costly. The second graph shows that discounts significantly influence purchasing decisions for a majority of Hawaiian customers (over 59 percent of them).

Recommendation: ABC needs to focus on building brand loyalty among its Hawaiian customers. The company could achieve this by maintaining quality standards, developing loyalty programs, offering exclusive discounts, exceptional customer service, and user-friendly feedback systems for customers. Additionally, the company could consider offering discounts to its customers as this would be an effective means to attract new customers and retain existing ones.

Figure 4

Interpretation: 89 percent of customers are willing to pay more for quality or well-known brands. This supports the idea that the Hawaiian market is quality sensitive, and hence, building brand loyalty is crucial for long-term success. Both graphs further indicate that beauty products are price inelastic, implying that price changes lead to a less than proportionate change in demand (Agarwal & Agarwal, 2022). This is because low prices in the case of beauty products may be interpreted as a decline in quality, leading to declining demand among quality-sensistive customers.