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Premium product is the product with exceptional quality or greater value than others of its kind. The premium product will be discussed in this report is SK-II Facial Treatment Essence which has a nickname “The Miracle Water”. This essence is the most signature skin care product of SK-II (Appendix).

This premium skin care product is a want but not a need. Needs are something that are required for human to survive. This would include the needs for food, clothing, shelter and health care. Everything that goes beyond these is a want. Wants are products or services that are not necessary but that human desire or wish for. Want is not really required but it is a good thing to have to make life more enjoyable (Erin Huffstetler, n.d.).

The SK-II Facial Treatment Essence targets on the wants of women customers. This is because women are undoubtedly very particular on the outlook. Every women hope to be evergreen or look young forever. Facial Treatment Essence consists of more than 90% Pitera. Pitera is a metabolic solution generated in the fermentation process of a unique strain of yeast (Sandra Low, Sunday 2nd November 2008). It is a must-have for healthy and radiant skin. There are significant evidences that consumer of this product looks a few years younger than actual age.

In addition, nowadays women also involve in the working world and it is no doubt that women also have a hectic lives. This essence can help these women to remove the pimples and tiredness that appear on face by maintain the skin’s natural renewal cycle to the optimum condition and also helps to balance the skin’s pH, reduce dark spots and make the skin’s tone evenly. Besides, this product is relatively easy to use because the function will remain good if without combines with any other product. That’s mean; it can work well alone and helps to avoid spending much time by putting many skin care products on face (Sandra Low, Sunday 2nd November 2008). This is what busy women want.

On the following report, the decision-making process which include characteristics that affect consumer buying behaviour, types of buying behaviour and consumer decision process, the aspects of the 4P Framework and satisfaction of the premium product will be discussed in detail.

2.0 Decision-making Process

2.1 Characteristics Affecting Consumer Behaviour

Consumer behaviour can be defined as the buying behaviour of final consumers-individuals and households who buy goods and services for personal consumption. Consumer behaviour is strongly influenced by many uncontrollable factors namely cultural, social, personal and psychological. Marketers cannot control these factors, but it is a must to take them into consideration (Kotler and Armstrong, 2006).

2.1.1 Culture Factor

The marketer needs to understand the role of the consumer’s culture, subculture and social class. Culture is the most fundamental cause of a person’s wants and behaviours. The influences of culture are different in every country. Each culture consists of smaller subcultures which comprise of nationalities, religions, racial groups and geographic regions. Almost every society possesses some form of social class structure. Social class is determined by various factors such as income, education, and wealth. People within the same social class will have similar buying behaviour (Asifo Shah, n.d.).

According to Shige Terao, research and development director for Global Personal Beauty at the Procter & Gamble Kobe Technical Centre, SK-II Facial Treatment Essence is without alcohol; therefore it is suitable for all skin types and also suitable for Muslim customers (the Star Online, 2008). Moreover, the SK-II ambassadors such as Australian actress and theatre director Cate Blanchett, China model Qi Qi and Malaysian actress and singer Lee Sin-je are able to inspire people from different countries to buy the product.

2.1.2 Social Factor

Social factors also influence the consumer behaviour. These factors include consumer’s groups, family, roles and status. Reference groups expose a person to new things, thus influence the person’s attitude or behaviour, this may affect the choices of brand and product. Consumer behaviour is deeply influenced by family members. Normally, people prefer products which are appropriate to their roles and status (Dhanan Sarwo utomo, 2007).

In this case, words of mouth play an important role. For example, if the mother is using SK-II Facial Treatment Essence and find it really worth to purchase, most probably the daughter will use the same product. Besides, commonly people like to share or recommend a good product like this miracle water with friends or people who belong in the same group. After witness the miracle that happened on the users, the friends of the users will sure have a try on this product.

2.1.3 Personal Factor

Personal characteristics like age, occupation, economic situation, lifestyle and personality also impact the consumer behaviour. A person needs different products and services in different age. Human life cycle consists of many stages which include young singles, married couples and unmarried couples. Occupation and economic situation of a person will also influence the buying behaviour. (Kotler and Armstrong, 2006).

People who work as flight attendant or model will purchase a high quality skin care product like SK-II Facial Treatment Essence which can help skin renewal and keep the skin looks radiant always, because outlooks stand at an important place in these kinds of occupations. Furthermore, most of the buyers are middle-age women who seek to stay young forever in the whole life cycle. Due to the price of the product, majority of people who buy this essence are people who have higher income.

2.1.4 Psychological Factor

A buyer’s decision also is influenced by psychological factors which comprise of motivation, perception, learning, beliefs and attitudes. There are three types of perceptual processes. Selective distortion describes the consumer try to interpret the information in a way that will support what the consumer already believes. On the other hand, selective retention is when the consumer is likely to retain information that supports the consumer beliefs. In case of selective attention, marketers tend to attract the consumer attention. Beliefs and attitudes are important for marketers to formulate about specific products and services because such beliefs and attitudes can affect consumer buying behaviour (Asifo Shah, n.d.).

Asian will prefer Japanese skin care products like SK-II Facial Treatment Essence because of the perception that Japanese skin care products are more suitable for Asian skin type. Furthermore, SK-II Company uses the advertisements with ambassadors that have flawless skin to convince people believe in the miracle of this essence.

2.2 Types of Buying Decision Behaviour

Buying behaviour varies from person to person. There are four types of buying behaviour. Complex buying behaviour is the situation where the consumer purchases a high value and risky product. The consumer is highly involves in a purchase and perceives significant differences among brands. Whereas dissonance buying behaviour is where the buyer is highly involves in the purchase but a less significant differences among brands. Habitual buying behaviour is when the buyer doesn’t have any kind of involvement. The purchase will only depend on brand’s familiarity. Variety seeking behaviour is where the buyer has low involvement but there are significant differences among brands (Raja Vikram, 2010).

People purchase the Facial Treatment Essence is normally based on the complex buying behaviour. The price of this essence is expensive if compare with many other brands of its kind, thus it is quite risky to purchase. The consumer usually will get loads of information about this product from many sources before purchase.

The significant difference of this product is the unique ingredient called Pitera. Pitera is the secret to flawless skin which can only found in SK-II products. It is a naturally-occurring liquid from the yeast fermentation process uses exclusive yeast which differs from other skin care brands that based on yeast from beer (Sandra Low, Sunday 2nd November 2008).

2.3 The Buyer Decision Process

Figure 1 The Buyer Decision Process (Lars Perner, n.d.)

Research suggests that a consumer passes through five stages of buyer decision process as shown in figure 1. Generally, consumers of SK-II Facial Treatment Essence follow this theory. The first stage is problem recognition. At this stage, the consumer recognizes the need of a skin care product. The second stage is information search which is when the consumer tries to search for some alternatives skin care’s brands. Next stage is Assessment of alternatives. The consumer will evaluate the value of different brands, products and services. The following step is the purchase decision. The consumer makes a decision and selects SK-II Facial Treatment Essence to solve the problem. On the post-purchase Assessment stage, the consumer will continue to use the same product if satisfied with the product. However, sometimes consumers may not follow the sequence of the buyer decision process or may not go through all the process in the real world. It is depends on the type of the product or service as shown in the figure 1 (Lars Perner, n.d.).

3.0 4P Framework

4Ps of marketing also known as the marketing mix refers to the primary elements that must be attended to in order to properly market a product. The 4Ps comprise of product, price, place and promotion as shown in figure 2 (Jed C. Jones Ph D, 2007). Nowadays, with marketing more integrated into organizations and with a wider variety of products and markets, 3 P’s such as people, packaging and process are added to extend its usefulness. However, the marketing mix most commonly remains based on this 4 P’s (NetMBA, n.d.).

Figure 2 The Marketing Mix (NetMBA, n.d.)

3.1 Product

A product is anything that is capable of satisfying customer needs. Service is also considering as a product, it is an intangible product. Almost all kind of products possess a brand; strong brand name is important because it can have positive effects on customer perception and thus affect the purchase decision. Branding refers to the process by which companies differentiate their product offerings from the competition. By developing a distinctive name, packaging and design, a brand is created (David Jobber, 2007).

SK-II is a high quality premium brand; the company is more interested in the high-end market. Therefore, SK-II is focus on the product quality, brand recognition and differentiation in order to secure repeat customers. The SK-II Facial Treatment Essence is a luxury product which has the “Japanese myth” around it. This product has a distinctive odour, perfume free liquid and natural ingredients with emphasis of Pitera. Pitera can only be found in SK-II products; which make the product out-standing and unique. It is the most important SK-II attribute. Besides, this product is known for its superior technology.

Most of the consumers purchase is based on the trust in brand quality and reputation. This can be shown in SK-II early market in Korea. Compared to other Asian, Koreans are very status driven, and only considering French and Japanese cosmetics brands as high quality and must-haves. SK-II started to become famous in Korea when word-of mouth spread common perceptions about the brand. These perceptions were the high quality of the products which made a difference feel and the prices that were higher than other products made it well known across Korea and quickly became a status symbol (Martin Roll, n.d.).

SK-II has a sophisticated packaging, which make it looks more luxurious. Besides, compare to the packaging of a typical American cosmetics brand, SK-II uses deep maroon colour scheme which seen more sedate and it also target on the Asian concept of beauty; white and flawless which make it able to sustain as a global brand (Martin Roll, n.d.).

3.2 Price

Of all the aspects of the marketing mix, price is the only one which is the revenue earner, all the others are costs. The price of a product is what the company gets back in return for all the effort that is put into manufacturing and marketing the product (David Jobber, 2007).

SK-II is targeting sophisticated middle-age women whose buying power is relatively secure and less price sensitive. This company uses the premium pricing strategy to sustain global brands status to better compete with international firms and to avoid competing primarily on low cost and price tactics. Testers and freebies are somewhat restricted to maintain the value of the brand. Its price is generally higher than most of its competitors namely, Clinique, Lancôme, Biotherm and Shiseido.

In addition, SK-II adjusts the product price by using international pricing strategy. The price is different in different countries. For example, SK-II Facial Treatment Essence sells at lower price in China. Segmented pricing strategy is also used by the company to adjust the product price. This can be shown as the price of the essence are different in the internet if compare to department store and usually the consumers can get the product with a lower price in the internet.

3.3 Place

Place refers to a physical place or a virtual place where products can be sold to consumers. It is concerned with various methods of transporting and storing products, then making the products available for the customer. Getting the right product to right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who will then sell to retailers, while others will prefer to sell directly to retailers or customers (The Times 100, n.d.).

SK-II launched over 25 years ago in Japan and has been widely expanded to the whole of Asia, setting up outlets in China, South Korea, Malaysia and some western countries like United States and United Kingdom. Regarding to the distribution channels, SK-II manufacturer sells to the wholesaler and the wholesaler sells to the retailer then the retailer sells to the consumer. SK-II counters are available in department stores, and for some countries; SK-II counters also available in convenience drug stores and major pharmacy chain. Furthermore, internet has created a new channel for distribution. Consumers who have purchased the SK-II Facial Treatment Essence before can choose to purchase in internet on the next time; it is very convenient.

3.4 Promotion

Promotion is the tool that marketers use for marketing communication of products to the customers. It provides information that will Help the customers in making a decision to purchase a product. Advertising, personal selling, direct marketing, internet marketing and public relation are few means of promoting the products (Adam Khan Kasi, 2010).

SK-II has been implementing various types of promotion but the company is more focus on the advertising part. As Japanese brands Shiseido, Kanebo and Kose already had similar products, when SK-II was launched; whitening skin care was nothing new. But Procter & Gamble Company who own SK-II was the first to make use of multiple popular Asian celebrities with white and flawless skin such as the Hong Kong singer and actress Sammi Cheng, and China model Qi Qi to promote the brand (Martin Roll, n.d.).

In addition, well structured slogan of SK-II Facial Treatment Essence which can be remembered easily by the public, such as “lean a little closer” and “after 4 weeks, 12 years younger skin, fine lines decreased by 47%”, coupled with famous celebrities who look younger than actual age are able to raises the desire of consumers to look like the spokesperson. Moreover, SK-II also printed advertisements and reviews its scientific products in beauty magazines in order to reach large amount of audience.

Aside from this, the SK-II products only have the usage instructions in Japanese language. The company intentionally make it no option for the customers but to go to the up-scale department stores, where highly trained counsellors will demonstrate the products and answer questions (Martin Roll, n.d.).

4.0 Conclusion

The premium skin care product; SK-II Facial Treatment Essence is well established in the high-end market. In the aspect of consumer behaviour, the company understand the role of the consumer’s culture; this product is suitable for everyone; regardless of ages, culture and ethnics. For the social factors, the customers will purchase through the referral of the high quality and good reputation of the essence from the people around who have been using it. Besides, the company is mainly targeting on high income middle-age customers who have less price-sensitive and seek for younger looking skin. The company also concerns about the psychological factors that will influence the buying behaviour. Therefore, it heavily invested on advertising this product to stimulate the needs of the consumers.

The SK-II company has excellent marketing mix or the 4 P’s of marketing which include product, price, place and promotion. SK-II Facial Treatment Essence is a very out-standing premium product; it has a strong brand and differentiation. It is a very advance product which consists of 90% of Pitera; this make the essence become the most signature product of SK-II. However, the pricing strategy of SK-II should adjust lower as SK-II products price are higher than most of its competitors; by doing this, it can compete much better with other premium skin care brands. Besides, SK-II has a good distribution channel. The consumers can get the products easily and it keeps expanding. Apart from this, SK-II has been doing many types of promotion and all seems very useful to create the customers awareness. However, the company is more focus on the advertising.

Basically, the company is excellently makes the SK-II Facial Treatment Essence a successful premium product but there are some points that the company should take into account. SK-II should target untapped market such as man and the seniors to expand its market. Besides, SK-II also should create membership program to stimulate frequent purchase and sustain repeat customers. Furthermore, SK-II should consider the free gift and gift-with-purchase techniques which its competitor Estee Lauder does. This technique is able to attract new buyers who might not consider SK-II products and rewarding loyal customers for purchasing SK-II products.

(2970 words)

References

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Erin Huffstetler (n.d.) Wants vs. Needs-How to Distinguish Between the Two. [Online] Available from: http://frugalliving.about.com/od/frugalliving101/qt/Wants_vs_Needs.htm [Retrieved: 8 December 2010]

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NetMBA.com (n.d.) The Marketing Mix (The 4P’s of Marketing). [Online] Available from: http://www.netmba.com/marketing/mix/ [Retrieved: 8 December 2010]

Raja Vikram (2010) Types of Buying Decision Behaviour. Saching.com, [Online] Available from: http://www.saching.com/Articles/Types-of-Buying-Decision-Behavior-1708.html [Retrieved: 8 November 2010]

Sandra Low (Sunday 2nd November 2008) Pretty Pitera, The Star Online. [Online] Available from: http://thestar.com.my/lifestyle/story.asp?file=/2008/11/2/lifeliving/2339424&sec=lifeliving [Retrieved: 1 November 2010]

The Times 100 (n.d.) Marketing mix (Price, Place, Promotion, Product). [Online] Available from: http://www.thetimes100.co.uk/theory/theory–marketing-mix-(price-place-promotion-product)–243.php [Retrieved: 3 December 2010]

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