Industrial Marketing Project

POLITEHNICA University of BucharestFaculty of Engineering in Foreign LanguagesBusiness Administration and Engineering in Industry

Industrial Marketing Project

Customer analysis of California Car Scents air freshenerson the Romanian market

Coordinator:Student: Dr. Ing. Cristian POPESCU U Andrei

Table of Contents

1.Product description California Car Scents22.Targeted market52.1Segmentation52.2Targeted customers and their decisions63.Unique Selling Proposition84.Questionnaire95.Conclusions11References11

1. Product description California Car Scents

Car Scents is the range of automotive spill proof air fresheners produced in the USA by California Scents. The company was founded in 1993 in Southern California and started by producing and selling air fresheners packed in aluminium canisters, similar to the ones used for packing fish cans, suitable for home, office or in the car.In the beginning, the company produced only one type of air freshener which was available in six scents. Along with the increased popularity of their products, the company extended their range and now, they have four main divisions: Household, Automotive, Pet and Fragrances.

The Car Scents are automotive air fresheners consisting of three scent pads made of organic recyclable fiber which are infused with fragrance oil (Figure 2) and are packed in aluminum cans as you can see in Figure 1. The black plastic cap acts as an air diffuser which gives the user the possibility to adjust the intensity of the scent.Figure 1 California Car Scents [2]

Since the big cities have the tendency to get more and more crowded with people spending more time in their cars, this involves an increase in the drivers and passengers need for comfort in the vehicles they are using.Figure 2 Oil infused scent pads [2]

The need for comfort does not only refer to the interior space or the ergonomics of the seats, but also the air quality and scent in the vehicle has become a need and also a demand for most of the drivers, leading to the development of a whole market of automotive air fresheners. They come in different forms regarding to packaging, usage, source of the fragrance and, state (solid, liquid or gas) and in a large variety of scents.California Scents offers a variety of 32 fragrances of their Car Scents range of products, from fruity scents to new car scent or even bubble gum. Figure 3 shows only a part of the product range.Figure 3 Variety of Scents [2]

On the Romanian market, the absolute leader is the Ambi Pur Car air freshener, with a market share of 84.8% (in 2009), according to this article, and the products offered by California Scents struggle to increase their share, competing with the market leader, with the Wunder-Baum hanging scented little trees and with other liquid or gel air fresheners or even promotional ones from gas stations.The competitive advantages of the Car Scents products can be summarised as: Spill-proof, meaning that no oil or other liquids may be spilled because they are infused in the fiber pads; Scent that lasts up to 60 days (I am a frequent user of these products and I can confirm this affirmation); Wide variety of fragrances in order to satisfy a broad range of customer demands and wants; They are packed in aluminium cans that fit perfectly in the cup holders of every car, and can be used discreetly, without needing to hang them from the rear-view mirror or clip them on the air vents The products are manufactured in the USA, with high quality standards; Enviro Kleen Certified they contain 100% pure fragrance oil, the fibers that carry these oils are biodegradable and the cans are made from recyclable aluminium; The plastic lid has an adjustable opening, allowing users to control the intensity of the scent, and also the life of the product.From all the 32 varieties of Car Scents, one of them is the bestseller on the Romanian market, that being the Golden State Delight one (Figure 4). The fragrance of this product is very similar to the flavour of the Turbo chewing gum which was very popular in the early and mid-90s and which are back on the market now. This resemblance makes this product very popular among the nostalgic 25-35 age segment of the buyers. I must confess that I prefer this scent from the same reason.Figure 4 Golden State Delight [3]

The market leader, Ambi Pur Car, although its also a car air freshener it comes in a different form. It is basically a bottle of fragranced oil with a diffuser that clips on to the air vents of the interior of the vehicle. It is sold as a pack of device (clip-on support and diffuser) + reserve, or the reserves separately (similar to the Gillette model). Although Ambi Pur Car is the market leader and the most popular product among the car air fresheners, its main disadvantage is the price. A starter pack of Ambi Pur Car (device and reserve) costs up to 40 RON (37.90 RON at Carrefour Hypermarket). Compared to that, a can of California Car Scents costs almost 15 RON (13.99 RON at Auchan Hypermarket, 17.99 at eMAG and 15 RON at most of the online dealers), making it cost 63.3% less than the market leader, both products being comparable in terms of lifecycle, quality, and both can be considered premium products on this market.Despite the fact that it is way cheaper than the market leader, it costs three times as much as another notable competitor product range which is the Wunder-Baum trees that are usually hanged by the rear view mirror. The scented trees cost almost 5 RON (4.99 RON at eMAG) and this being said, the price of the California Car Scents can be both an advantage or disadvantage depending on what other products they are compared with. As a conclusion of this first part you can see a SWOT analysis of the Car Scents product range. High popularity in online forums and communities of auto enthusiasts; Attending and sponsoring automotive related events (expositions, tuning shows, retro vehicles annual meetings) Products should be displayed in places frequented by car enthusiasts (car washes, parts and accessories shops, auto service units s.o.) and at pay-points of the big retailers as they can be easy targets for impulse buyers. May be perceived as expensive, compared to most of the competitors; Some people may be not consider them when buying, being used with the classic liquid or hanging fresheners; Currently not so widely exposed in popular places such as hypermarkets, gas stations a.o

Spill proof no liquids may spill in the car Aluminum package that fits every cup-holder of every car Long-lasting up to 60 days or even more Adjustable intensity of the scent Wide variety of fragrances (32) Environmental friendly Enviro Kleen Certified Made in USA Costs 63.3% less than the market leader

The avalanche of low priced (1-3 RON) and poor quality products available almost everywhere; People who prefer to buy the products mentioned above without considering quality and time-lasting

WeaknessesStrengths

OpportunitiesThreats

2. Targeted market

In this second chapter, I will describe the targeted market for the product analysed, along with the segmentation variables taken to account and the market segments considered. It is needless to say that it addresses the final consumer, being a business-to-consumer (B2C) product. However, if we take the case of rent-a-car or taxi companies that use this product, it can also be considered a business-to-business product, but this project will concentrate of the business-to-consumer approach.2.1 Segmentation

As Philip Kotler states in his book, Principles of Marketing 15th Edition, market segmentation involves dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes. This process is important because it gives the companies a framework to start from in order to reach their future customers more efficiently and more appropriate to their needs, wants, resources, buying behaviours and patterns and other variables.[1]Figure 5 Major segmentation variables for consumer markets [1]

As Figure 5 shows, the first variable I will consider will be the geographic one. Since the product can classified as premium considering its price segment, from the geographical and location point of view, our targeted customers live in urban or suburban areas, in developed or developing countries with moderate or warm climate. The climate aspect is quite important because, for example in a northern area with constantly cold climate, an air freshener based on vaporization of scented oils is absolutely useless.From the demographic point of view, the customers can have any age as long as they are legal to own and drive an automobile; can be either men or women and should have an average or higher income. Although gender should not be a segmentation criteria for marketing of products like the one analysed, some of the scents in the fragrance range can be more appealing to one of the two genders (e.g. the Golden State Delight has a scent similar to the Turbo chewing gum, which were part the childhoods of most of men between 25-35). If we consider each one of the variety of scents available individually, then the demographic segmentation may have different variables with different values, and in a real scenario that would be more efficient, but since this project has an educational purpose, I will consider a single segmentation process for the whole range of scents available.The psychographic segmentation variables that we can take into account are social class and personality. The potential buyers of our products are people from middle class who are passionate about their vehicles and give importance to using good quality products when it comes to maintaining and accessorizing their cars. Also, most of these people consider that the vehicle they drive should be a reflection of their personality and social status. For example, we all have friends or acquaintances that always keep their cars clean and with service always according to the schedule; they most probably use or will use California Car Scents to keep the air in their cars fresh and fragranced.From the behavioral point of view, the Car Scents products have benefits that make them appeal to a wide range of customer segments. For the practical and pragmatic users, they can be easily deposited in the vehicle, and do not contain liquids that may spill and damage the dashboard or the seats. They offer a wide range of possible scents to suit different tastes (they even have some licensed scents similar to designer fragrances from brands like Gucci, Christian Dior or Hugo Boss, in order to satisfy even the most sophisticated buyers). They are probably the most eco-friendly products in their market, having a recyclable package and biodegradable fibres infused with organic oil, so they appeal to people who are very interested in the environmental impact of the products they decide to buy and use. Also there are buyers who relate the quality of the products with the country or region they are produced (e.g. there is a segment of buyers that consider products made in China are poor quality) and based on the fact that the products are manufactured in the USA, this segment will also have its buyers. 2.2 Targeted customers and their decisions

Starting from the segmentation process described above we now have information about the people that may or will buy the products, people that should be appealed through marketing tools and campaigns.As for every other type of product, the customers certainly have expectations based on their personality, tastes or even on previous experiences with other brands or types of products from this market (car air fresheners).Two aspects that I think are important when deciding among the variety of car air fresheners available on the market are the price and the lasting of the products which can be considered the customer perceived value. A simple comparison based on the information printed on the packages of the products and on the prices presented in the first chapter shows that California Car Scents products have the best cost-per-day (or price to lasting ratio) compared to its main to competitors, Ambi Pur Car and Wunder Baum hanging trees.Table 1 Comparison of the cost per day of using air freshenersAmbi Pur CarWunder Baum treesCalifornia Car Scents

Price [RON]38515

Lasts up to [days]451460

Cost/Day0.840.350.25

Another set of aspects that I, as a consumer find particularly important are the form of packaging and the, lets say, modus operandi or how the product should be used and how it affects or improves the comfort of driving. For example, the little trees (Wunder Baum) must be hanged by the central rear-view mirror and in order to achieve the longest lasting of the product you should keep the plastic wrapping and unveil the product gradually, which is inconvenient and may affect the visibility of the driver. As for the other competitor (the Ambi Pur), it contains a small bottle filled with a perfumed oil which, in case of spilling will destroy the materials of the dashboard (it happened to me once and that was when I decided not to use it anymore). Also consumers surely want that their air fresheners to work all the time, which is hard to achieve with products that rely on the air flow from the air vents of the car in order to spread their smell.

Figure 6 above shows four different types of buying behaviors, as found in Kotlers book. The buying behaviour most appropriate to the products analysed is the Variety-seeking buying behaviour which involves low involvement from the customer although he perceives significant differences between brands.Figure 7 Consumer buying decision model (Belch model) [1]Figure 6 Consumer buying behaviors [1]

What Figure 7 shows is the Belch model of consumers buying decision process which I will analyse in the context of the products considered in this project. The first stage is the need or problem recognition, where the consumer discovers his previous air freshener ran out, or that he has a bad smell in the car, or he sees the product displayed or advertised somewhere and discover that he needs or wants it.The Information search stage is the one where the consumer gets informed about different products of the ones that he wants. This type of products, the air fresheners do not need a complex information search process. People usually decide based on information written on the package, or by references from friends and family (external) or based on their previous experiences and purchases (internal)The third stage is where the consumer evaluates the alternatives of brands available on the market based on the information he has and finally makes the decision to purchase one of them.Probably one of the most important stages in this process from the point of view of the car air fresheners is the postpurchase behaviour. I can write entire pages about what needs the products fulfil or how consumers perceive them, but in the end people try different brands and types of air fresheners and when they find one that meet or exceed their expectations they will become loyal to that particular brand, range or product and will eventually recommend it to their acquaintances and this happens in the postpurchase behaviour stage of the Belch model. Basically, as Kotler says, this stage is where the companies build profitable long-term relationships with their customers. [1]As a conclusion to this chapter, in order to succeed on the market of car air fresheners, I can identify some fundamental success factors: Convenient and comfortable to use package and form; Long lasting scent that meets (ideally exceeds) customers expectations; Wide variety of scents; Convenient price (price to days ratio)3. Unique Selling Proposition

After discovering the targeted segments of customers, a company must create a Unique Selling Proposition, which has to differentiate the product from its customers. Basically it should summarise the main benefits or the value that customers will receive when buying that product, by positioning it on an attractive place in the customers perception of brands. This is a powerful marketing instrument, especially for the consumer products that are usually bought impulsively or without prior information research from the customer. The selling or value proposition must state the products competitive advantages and differentiate it from the competitors. [1]From our products point of view, the main competitive advantages that we can use to differentiate it from its competitors are: It is long lasting; => Longer It is spill proof and therefore clean and comfortable to use => Cleaner Its eco-friendliness is certified = > GreenerThe three words written in italic should certainly be key words in the Unique Selling Proposition of our product. Another characteristic that is a benefit to customers is the fact that they come in a wide variety of fragrances and their names suggest more likely experiences or places (especially from the USA) than fruits or flowers with similar scent. Some examples of names include: Citrus Splash, Hawaiian Gardens, Golden State Delight, Desert Jasmine, Gardenia Del Mar, Emerald Bay and so on. The names of the fragrances also suggest natural sites and that backed up by the fact that they are made with organic oils can lead to referring to nature in the value proposition. As we all know, all the expensive designer fragrances and perfumes use natural oil extracts and in most cases their names refer to nature (e.g. Bulgari Aqua, Kenzo Flower) and in my opinion the value proposition can refer to the fact that the product, through its scent brings a bit of nature in the interior of the customers vehicles. Therefore, based on the arguments stated in this chapter, I consider that a good Unique Selling Proposition for the products analysed would be:California Car Scents: Brings nature in your car. Longer. Cleaner. Greener4. Questionnaire

A questionnaire is a form of marketing research, and to be more precise, it is usually a used a quantitative form of research in order to acquire primary data that may lead to customers insights. Those insights are information regarding to customers needs, wants and opinions about the products and help marketers find improvements in order to deliver higher customer value, and build more profitable customer relationships.There are several types of questions used in surveys and questionnaires, such as: open ended, closed ended, multiple choice, scaled and others. Although the open ended questions can provide deep information about each customers opinion, fixed answer questions have the big advantage that they simplify the responding process and the analysis of the replies.The following questionnaire (available on the next page) is an example that can be used to find information about the opinion of the air fresheners users. I should note from the start that it is addressed to people who own or drive vehicles, and therefore are potential buyers of the products.The population taken into account for this survey will be the people from Bucharest who own or drive a car. Although we should have a clear view of the size of the population, for this case it is quite difficult to know, because Bucharest is a city of transit and there are a lot of people living here but are registered in other cities; also there are many cars (especially company cars) registered in Bucharest but which are driven in other cities where the company runs its operations. Therefore, based on the fact that there are almost 900000 cars registered in Bucharest, we will consider that the number of cars driven in other cities compensates the number of people that live in Bucharest and are registered in other cities and also have or drive cars. Therefore the population considered for this survey will be N=900.000 people.The next step for computing the sample size will be choosing the margin of error which basically shows how closely the answers received will be to the true value. We will choose the most common value which is the e=5% margin of error, or confidence interval.Further, a confidence level should be chosen, which shows how accurate the answers will integrate into the chosen confidence interval. Again we will choose the most commonly used value which is 95%. Another thing considered is the standard of deviation which tells how much variance should be accepted which usual is p=0.5. The confidence level corresponds to a Z-number, which in our case will be z=1.96. [3]

Using the formula above, the necessary sample size will be of 384 people.

We at California Scents truly value our customers opinions and we struggle to constantly improve our products for your delight. Therefore we would be grateful if you could give us 5 minutes of your time to answer the following questions.

1. Which of the following ranges would reflect your current age?[ ] 18-25 [ ] 25-35 [ ] 35-45 [ ] 45 and above2. Do you use air fresheners in your vehicle or in the one you drive?[ ] YES [ ] NO3. If you do, what types of products do you prefer?[ ] hangers [ ] vent-clip [ ] canned [ ] aerosols [ ] other type4. How long would you like your air-freshener to last?[ ] 7-14 days [ ] 14-30 days [ ] 30-45 days [ ] 45-60 days [ ] over 60 days5. For that amount of time, what price (in RON) are you willing to pay? [ ] < 2 [ ] 2-5 [ ] 5-10 [ ] 10-15 [ ] 15-20 [ ] 20-25 [ ] 25-30 [ ] >30 6. Using the scale below, grade the following characteristics of an air freshener in general, based on their importance, according to your preferences:1= unimportant, 2=less important, 3=fairly important, 4=important, 5=very importantLong lasting[ ]Price range[ ]Fragrance aroma[ ]Packaging, form & design[ ]Adjustable intensity[ ]Other:[ ]7. What brand of car air freshener do you usually buy?[ ] Areon [ ] California Scents [ ] Wunder-Baum [ ] Other: ..[ ] Ambi Pur [ ] Gas station brand [ ] OEM (car manufacturer brand)8. What type of fragrance do you prefer for the air freshener you use in the car?[ ] Fruity [ ] Floral [ ] Anti-tobacco [ ] Bubble Gum [ ] Other:9. Have you ever used one of our products? [ ] YES [ ] NO10. If your answer to the previous question was YES, could you rate the characteristics, based on your satisfaction with our products, using the scale below?1= unsatisfied, 2=poorly satisfied, 3=average, 4=satisfied, 5=the best Ive triedLong lasting[ ]Packaging, form & design[ ]Price range[ ] Adjustable intensity[ ]Fragrance aroma[ ]Other:[ ]11. Do you have any other comments or suggestions regarding our company, products or even this questionnaire?....Thank you!

5. Conclusions

The California Car Scents air fresheners are convenience products which possess a wide set of competitive advantages in relation to their competitors on the Romanian market, which we described in detail in the first chapter. Although the leader of this market is in its maturity stage of the product life cycle, the products we analyse are somewhere between the introduction stage and the growth one, as they were introduced relatively recent and they market share is following a growing trend.Based on the above statement, the product has a high potential of developing its status on the market and further actions should be directed into advertising and raising the customer awareness as high as possible. Another path that should be exploited would be the one of automotive enthusiast as the product is quite popular among them.

References

[1] Philip Kotler, Gary Armstrong Principles of Marketing, 15th Edition Pearson Education, 2014;

[2] California Scents Website - http://californiascents.com/product/california-car-scents/[3] Survey Monkey Website - https://www.surveymonkey.com/blog/en/sample-size-calculator/

Bucharest2015

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