Research Background

1.1.1 Global fragrance market:

The Cosmetics Industry is one of the largest part in The Beauty and Personal Care industry. Cosmetics firms merchandize makeup/color cosmetics, skin and suncare products, fragrances, toiletries, and numerous other grooming products. According to a report by The Statista (2015) the global cosmetic market achieved approximately 180 billion euros in 2012. Since the last decade, the cosmetics production has been dominated by multinational corporations. The global cosmetics industry is categorized into six primary segments which skincare is the the largest accounting for 34.1% in 2013. Due to the economic recession, the growth rate of cosmetics market suffered a falling trend to a mere 1% in 2009. However, in the next five years, cosmetics have had a comeback; from 2010 to 2014 sales results displayed an average 2.16% growth.

Figure 1.1.1 Annual growth of the global cosmetics market from 2004 to 2014

Nowadays, the perfume market performs the most important role in the cosmetics and toiletries industry. A report by Global Industry Analysist, Inc. (2015), claims that woman’s perfume segment has been leading the whole market and predicted to create steady demand over the following years. The men’s perfume segment is also predicted to achieve stronger growth than ever before thanks to the adjustment in perception towards the priority of male grooming. Fragrances, once considered as non-essential items, have gradually transformed themselves into must-have product that form a great part of personal grooming. Fragrances are a method of expressing individual style, thereby making it a consumer-driven isdustry. The fragrance market is also controlled by fickle and ever-changing fashion trends. Based on a 2012 report, the global perfume industry is valued at around $28 billions (Kafkaesque 2014) and estimated at nearly $30 billions in 2013 according to market research company Mintel. A recent report by Global Industry Analysts predicts the global perfume markets will reach about $456 billions by 2018.

Matt Bodimeade (2013) states: “The market is set to benefit from the growing trend towards consumer urbanization, higher spending propensity and the heightened importance on personal appearance and grooming. In addition, increased demand for youth-oriented floral and exotic fragrances and celebrity perfumes will set the pace for rapid market expansion.” Companies are attempting to tap into this lucrative market by publishing more and more new fragrances each year. Jordan River of The Fragrant Man, has post in Michael Edwards new book: Fragrances of the World, which describes the boost in the number of perfume released each year. Jordan wirtes: “In 1993 there were 132 new perfume releases, by 2003 the number had grown to 581. As noted above, 2012 saw 1330 releases and in 2013 retail shelves made room for a futher 1492 new perfumes.”

1.1.2 Vietnam fragrance market

According to a merket research by company Mintel(2014), the global fragrance market approach to $30 billions in 2013, with Indonesia, India and Vietnam amongst the fastest growing markets. Except for Japan, the Asian fragrance marketplace is rapidly developing at a fast pace. Vietnam recorded a CAGR of 15%, South Korea 12%, Indonesia 44% and India 25% over the last five years.

The rapid growth of middle class as well as the widespread aspiration of Western lifestyles, international brands have potential to develop their fragrance bussiness.

Vietnam is certainly a rising star- however the market share is migrating from domestics companies to the multinations. The local brands has to fight back with innovations and advanced technology.

Miss Saigon is a famous perfume brand name of Saigon Cosmetics Corporation(SCC) which has gain achivements of customers both local and abroad for many years. Its shape illustrates the Vietnames lady wearing a traditional clothes called Ao dai and a conical leaf hat. Until 2012, Saigon Group held the no.1 position. However, its market share has fallen nearly three points to 14.9% because of the fact that direct sellers such as Oriflame and Avon and other international brand have gained strength.

With the population of 90 millions, Vietnam becomes a potential market for this segment. According to Euromonitor International (2014), there was a strong growth recorded in Vietnam fragrance market in 2010, about 21.2% approximate 21.5 millions USD.

In 2012, fragrance market recorded a value growth rate of 19%. An article in Euromonitor (2012) states about 92% of fragrances sold are imported which indicates

that domestic products seem not really appeal to local consumers. Article also points out that the loyalty of the consumer is very important in fragrance business. Perfume companies have to invest a huge resource every year to take care of their loyal customers. Conducting reseaches to indentify what consumers concern and develop strategies to gain back the customers are what a dosmetic perfume company in Vietnam need to execute now.

1.1.3. Consumer’s buying behaviour

Studies of consumer behaviour usually involve in determination of consumers and their buying behaviour(William, 1951). Engel, Blackwell and Miniard(1995) indicated that customer behavior associated with collecting, consuming and disposing of services and products, containing the making decision process that come first and follow these actions. Therefore, determining the indicators which have impaction on the buying behaviour could raise the sales revenue. According to The Theory of Reasoned Action (Ajzen&Fishbein, 1980), a person’s behavioural intention is determined by the two basis components which are attitude toward behaviour and subjective norm. The combination of these two indicators will directly impact on an individual’s behavioural intention which is said to be equal to behaviour (Suddin, Geoffrey and Hanudin, 2009).

Whitlark, Geurts and Swenson (1993) describe buying intention as a purchase probability involved in an intention classification at the percentage of individuals that will actually buy product.

Stallworth (2008) defines consumer buying behaviour is a group of activities which associates with the puchase and disposing of products and services which originates from the consumer’s emotional and metal needs and behavioural responses. Gabbot and Hogg (1998) state that the consumer making decision process may include various

activities and stages. Consumer buying behaviour is considered as a complex, intense issue which cannot be determined easily and commonly. The definition of consumer buying behaviour consequently has been indentified in Therefore, the concept of consumer buying behaviour has been defined in disparate ways by disparate researchers. In this current study, we define consumer purchase intention as consumer who make a purchase and plan to repeat it.