McCann Erickson Perfume Market ReportSecondary research

The fragrance market

In 2010, the women’s fragrance market is valued at £739 million, a 2% rise over the previous year. Although the global recession has happened, the fragrance market has done reasonably well.

2009 launched 323 new women’s fragrances, though this wasn’t enough to fit consumer needs, suddenly the need to have the latest fragrance wasn’t something that appealed to women; instead consumers revisited classic fragrances, as people now want value and authenticity with brands they already have familiarity with.

Women buy fragrances as a sense of image and personality, this is one of the main reasons behind the fragrance purchases. 23% of women use fragrance to express themselves and their personality.

The biggest time for fragrance sales is the Christmas period, with 75% of the overall sale taking place in the winter months. This is due to some perfumes being expensive, and regarded as a luxury or a gift.

High end fragrances continue to dominate the mass market products with 78% of sales in 2009 versus 22% of sales for the mass market.

Fragrance and Gender

Women who are in full time work, with an annual salary of over 50k, are likely to own four or more bottles of fragrance as they have more disposable income.

40% of 16-24’s and 25% of 35-44 say fragrance is expensive. Gender labelling has become less relevant as fragrances are now targeted more at

personality types. 8/10 women use fragrances. 25-34 are more experimental with fragrances; 45% of whom

buy different fragrances so they can have a wardrobe of perfume to choose from. 37% of the 16-24 age bracket don’t always apply fragrance daily. 1 in 5 women are cautious consumers and buy their fragrance carefully.

Fragrance and Age

Full time working women aged under 25 - 34, are the heaviest users of fragrances. Age 25-34 represent a growing opportunity for the fragrance market. This group is estimated

to group by 10.6% to 2015 “If someone liked wearing a fragrance in their 20’s they might return to it later on in life

because of the positive associations.” From 19-22 prefer brands such as Moschino From 30-40 preferred brands such as Lancôme and Dior and the more famous brand for the

older woman Chanel.

Fragrances and online shopping

“There are some big discounts to be enjoyed purchasing fragrance online and brand loyalty is higher in this sector than others, so consumers can easily benefit from cheaper prices buying brands” said Claire Briney, head of Euromonitor’s global cosmetics and toiletries research programme

Online shopping is predominately associated with the younger groups. In the UK one of the highest internet users of the world sales of consumer goods continue to

rise. Euromonitor: online shoppers in 2003 expected to spend €1.1 billion. With online shopping you can get discounts of up to 40%. Manufacturers fear that online marketing is not a proper means of selling emotional

products 15% of25-34s buy fragrances over the internet

Product Type

Changes in purchasing habits means that buyers are more interested in quality, authenticity and “value” rather than image.

Organic fragrances correspond to consumers’ views on authenticity and value. The founder of The Organic Pharmacy believes that organic fragrance is now at the same

point as organic skincare was ten years ago. Quality packaging is crucial to instilling perceived value Women in their 30s and 40s apply fragrance only a few times a week. By making portable

formats available, they may be persuaded to use it more often. Due to the smoking ban, consumers now want to get rid of environmental odours so now

there is a big opportunity to aim at this market or implementing refillable bottles. 20-44-year-olds and C2s are most interested in prices and every-day low prices may

persuade them more than sales and special deals. According to fragrance expert Roja Dove, floral scents make a return in uncertain times, as

they are easy to understand.

Primary Research

Qualitative research

We carried out our primary research in the form of one-on-one open-question interviews, trying to find out peoples’ views into the perfume market. We wanted to be able to establish what people experienced when they applied perfume and the use of open-questions allowed for a better insight into understand the mind-set of our demographic target audience.

We took a method used in focus groups, which is association / completion of psycho-drawings. We found them to be very useful because they allowed the interviewees to openly express attitudes towards perfume and we managed to discover what kind of associations they make related to the idea of wearing fragrance. The majority of drawings represent free-flowing lines, possibly connected to the idea of femininity and sensuality. Drawings of flowers also link back to this idea and offer an insight of preferred scents.

A conclusion from our first set of questions was that women use perfume as an answer to all their insecurities, the most predominant one being lack of confidence. These findings confirm the trend of selling perfume according to personality rather than just gender. It is beneficial to our advertising campaign as our product is targeted at full-time working women who lay emphasis on their image and want to boost their confidence at the work-place.

Attitudes towards pricing have shown that consumers are more interested in quality and smell rather than worry about the amount of money they pay, this supports the shift towards authenticity and value rather than image.

Qualitative research part 2

Second primary research was the investigation into shop pricing and packing, whilst paying attention to the consumers in each shop. Five shops were chosen as our target so it would help us to gain a larger understanding of the perfume market in a range of different demographic shops.

Boots- Price Range £11-£83- Average£30-50Range of qualities and smells, so can target large audiencesFeminine bottles, curved shaped and writing, pinks, reds peaches, and gold’sEach boxing had particular way of representing target. Chanel No5, white and black edging, simple and classic design. Ed Hardy was all eccentric. Ricci Ricci, young teen and playful. Audience in Boots; older ladies of different shapes and sizes of middle to working class.

Next- Price range up to £12Only have Next own brand, so not a well-known choiceShop aimed at middle class sophisticated demographics- Our target audience Simple designs, basic similar smellsVery girly looking, simple appeal for womenAudience inside were middle aged, smart businesswomen.

BodyCare Coventry Open to large audiences, targeting working class demographicsCheap affordable options-Celebrity based products, Jordan, Celine Dion, Kylie. Aimed at audiences who want to follow these trendsShoppers of lower demographicsProducts bright colours, celebrity pictures and names all over products, buying part of the celebrity

Perfume Shop Middle to upper class demographicsStrong focus on designer brandsStylish customers who want to be associated with the brandProduct design/ bottle simple but sleek, emphasis on crystals and objects associated with wealthPrice range up to £70

Debenhams High end stalls, including Chanel, Clarins and LancômeExclusive fell to the perfumesTarget audiences middle to upper classQuestionnaires- Results for all age groups and demographics

Figure 1 Age Group

19-2526-3233-3940+

Figure 2

DivorcedMarriedEngagedSingleIn RelationshipWidowed

Figure 3 How often do you buy perfume?

Once a weekFortnightMonth6 MonthYearNever

Figure 4 Most familiar brandsFigure 5 How often do you wear perfume?

Paco RabbaneDKNYEscadaCalvin KleinChanel

1 Never

Really

Wear

it 2 3 4

5 Someti

mes 6 7 8 9

10 All the ti

me02468

1012

Series1

Figure 6 Which shape? Figure 7 Price

£0-10£11-20£21-30£31-40£41-50£50+

Figure 8 Can’t live without Figure 9 Can live without

Waste of

money

Body Spray

No use Other0

2

4

6

8

10

Series1

Hypothesis (Not in Word Count)

The questionnaire and the graphs above was our first attempt at finding out new quantitative data regarding the perfume market. When we undertook our questionnaire we did not get our correct target audience. However the information above we have still kept because it gives us a larger knowledge of the whole of the perfume market and demographics. It makes us aware of which audiences want what, and how much they are willing to pay. This has helped us gain a greater understanding of our target demographics of 25-34.

The problems we had were;

Bottle 1

Bottle 2

Bottle 3

Bottle 4

Bottle 5

02468

1012

Series1

Happy

Confidence

Signatu

reBran

d012345678

Series1

1. Screening questions in regards to occupation and marital status were not of any relevance to our demographics. Regarding occupation we couldn’t place them in certain categories because it was too broad, and needed to have a selected view of who we are actually targeting.

2. The question in relation to purchasing is unrealistic due to many perfumes being given as gifts. No one goes through bottles in a weekly basis to go through them often.

3. The bottles shapes are only reference to five brands and don’t take in to account the other thousands of brands, only take in a select view.

4. When completing the questionnaire the target market was not achieved5. The other problem you have when completing the questionnaire is that many people would

often lie regarding many of the questions. People don’t often tell the truth with answers they just go along with the middle answer something that wouldn’t make a bad image against them.

6. Another problem we had was with such a wide range of results it made it hard to create correlations and averages to get an understanding of which items relate together. In the new questionnaire we have to make sure results are similar.

Correlation of Results

A correlation that we found was between how often someone buys an item compared to the price they paid. The result of 67.8% shows a high level of correlation so it gives an understanding of how much people spend compared to their usage.

The other point we found was how often people used perfume. Due to the range of results we decided to look into the median of this result. The result was a median of five, people ‘sometimes’ wear it. This supports our secondary research because we found out that the majority of people from all age groups only wear it sometimes.

Results for Final Questionnaire

Ques 1 How old are you? Ques 2 Your demographic?

19 - 25 26 - 32 33 - 39 40+0

2

4

6

8

10

12

ABC1C2DE

Ques 3 Perfume a gift or a purchase? Ques 5 How much you pay for bottle of perfume?

Ques 6 Would you be able to live without perfume?

Ques 7 If no why? Ques 8 If yes why?

Conclusion

From our secondary research we came to the conclusion that the fragrance market is a profitable industry in which our perfume will be marketed at 25-34 year old women. Through qualitative research, our audience was defined, again, through secondary sources like the internet and Mintel

Gift Purchase0

2

4

6

8

10

12

Series1

Yes No0

2

4

6

8

10

12

HappyConfidenceSignatureBrandOther

Waste of MoneyPrefer body sprayNo useOther

£0 - 1£11 - 20£21 - 30£31 - 40£41 - 50£50+

reports. We aim to target women from 25-34 due to the conclusions from the fact they like a wardrobe of perfumes and the idea of career woman. The issue with validity arose from our first set of questions leading into a use of trial and error when creating questionnaires in order to make a clearer correlation between social status, age and personal use of perfume.

From our primary research, women are seen as an easy demographic to target with perfumes in particular, due to their lack of confidence and self-esteem. This conclusion was formed from the results of all questionnaires where women were asked if they could live without perfume. 55% of women said they couldn’t result in a market for over half over the women asked due to the perfume making the wearer more confident. On average many women found the price of £31-£40 as an acceptable price to pay for perfume, to pay for their ‘Confidence in a Bottle’. This shows that a fragrance is bought for quality over price.

From our final results 55% of the women were in the demographic of C1 which was lower middle class.14 out of 20 said that they thought perfume was a waste of money. Many of the women asked would receive perfume as a gift which means that the perfume should be targeted women around the Christmas period.

Appendices

Mintel - Women's Fragrances - UK - August 2010

Women's Fragrances, UK Market Intelligence Report, August 2007

UK Fine Fragrance Industry Market Research - Commissioned by The Fragrance Foundation United Kingdom – May 2005

Euromonitor International's report "The World Market for Cosmetics and Toiletries"

Key Fragrance Findings from The Premium Market Report 2009/10 IM Associates in partnership with YouGov for The Premium Market Report

Women's Fragrances, UK Market Intelligence Report, August 2007

The Perfume Industry (http://www.worldwideperfume.com/perfume-industry.html)

(http://fashion.telegraph.co.uk/news-features/TMG7945116/Why-the-perfume-industry-stinks.html)

http://en.wikipedia.org/wiki/Perfume

http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=280578

http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=704

http://www.yousaytoo.com/select-perfume-by-age-group/340107

http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=479878

http://www.cosmeticsdesign-europe.com/Products-Markets/Fragrance-sales-boosted-by-the-Internet

http://oxygen.mintel.com/sinatra/oxygen/display/id=479906