Marketing Research Report: ABC Beauty Brand in Hawaii

Introduction and Research Objectives

ABC Company Ltd. contracted our firm to carry out 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 hair care and lip care to 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 central problem is that ABC's top leadership is uncertain whether Hawaii would offer a feasible market for its products and which marketing strategies would ensure effective market penetration. This research was commissioned 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, each tied to one element of the marketing mix, were: (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.

Demographics are a crucial determinant of business strategy and success. They dictate fundamental business factors, including the nature of promotional activities, 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 US Census Bureau places the total population of Hawaii at 1.4 million as of July 2022, with females comprising 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, of whom 34 percent hold a bachelor's degree or higher qualification.

With 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 & Kollar, 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 personal appearance and are willing to pay a premium for quality beauty products.

The research design outlines the overall plan of action for the study (Babin et al., 2020). The research adopted a descriptive research design, whose main focus is describing phenomena as they exist without establishing cause-and-effect relationships (Babin et al., 2020). Descriptive research designs are appropriate when the aim is to answer questions around who, where, when, and what — rather than to determine why phenomena occur (Babin et al., 2020). The goal of this market research was to determine what kinds of beauty products align best with the Hawaiian market, where customers prefer to make their purchases, and what advertising and pricing strategies appeal most to Hawaiian consumers. These aims make the descriptive design highly appropriate, as the objective is to understand consumer behavior in the Hawaiian market rather than to explain its underlying causes.

Hawaii's Demographic Profile

The researchers collected primary data — that is, data obtained for the first time directly from the field. Primary data was preferred 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; it was therefore important to obtain the perspectives and ideas of potential customers directly. Second, the company's range of beauty products is quite unique, and hence data collected by other researchers may not effectively inform marketing decisions at ABC. Additionally, consumer tastes and preferences for beauty products are highly dynamic, meaning that 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 gathered responses on which beauty products Hawaiians commonly use, how frequently they make purchases, where they prefer to buy beauty products, their preferred advertising channels, 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 simultaneously and at minimal cost.

The survey was shared widely on Hawaii residents' social media clubs and groups across multiple platforms. All who wished to participate were permitted to do so, provided they submitted their responses within the set timelines. This process yielded a final sample of 3,450 participants who completed the survey. The main challenge was limiting responses to Hawaiians only, since anyone could share the survey link with their networks. To ensure objectivity, responses from non-Hawaiian residents were excluded from the analysis.

Survey data was analyzed using frequency statistics, and graphs and tables were used to display the number of participants who selected each response for each question. This presentation method was preferred because it provides an at-a-glance view of the findings and can be easily interpreted without requiring specialized expertise. Given that the research findings were to be disseminated to a highly diverse audience, presenting results in an accessible format was a priority.

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

Research Design and Methodology

Table 1: Frequency of Survey Responses

State of residence: Hawaii (3,450); Other (208).

City of residence: Urban (3,080); Rural (250); Semi-Urban (120).

Gender: Male (345); Female (3,100); Other (5).

Direct/indirect consumer of beauty products: Yes (3,450); No (5).

Beauty products commonly consumed: Skin Care (2,605); Hair Care (3,100); Make-up and Lip Care (1,403); Eye Care (805); Chemical Exfoliation (287).

Frequency of purchase: Weekly (84); Monthly (3,297); Bi-Annually (40); Annually (24); Never (5).