International consumer behaviour and positioning strategy for Simple 1

International consumer behaviour and positioning strategy for Simple

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 International consumer behaviour and positioning strategy for Simple 2

Executive summary

Globalization has become the current trend of firms in the recent age owing to the firms' need to

maximize their earnings from the diverse markets. The globalization of markets which refers to

the convergence of consumer needs presents a situation where the same product is being offered

in the international market. This strategy will be utilized by Simple as it enters the Hong Kong

market. Before entry, the firm should assess the macro-environment using the PESTEL with a

concentration on the political, economic, sociocultural, and technological factors which this

report finds vitally essential. These environmental facets should be factored in during the

development of the expansion strategy to inform the firm of the best methodologies for market

entry and marketing. While positioning, a recommendation for the use of a hybrid strategy has

been given herein after a critical evaluation of all four positioning strategies. With the ideal

customer being a learned woman with exposure from the internet and social media, a global

brand will auger well with the market. Also, designing the product to have Chinese cultural cues

will aid the firm to penetrate deeper into the Hong Kong market.
 International consumer behaviour and positioning strategy for Simple 3

Table of Contents

Executive summary.........................................................................................................................2

Introduction......................................................................................................................................4

Evaluation of macro-environment factors impacting brand performance.......................................4

Target market analysis and consumer analysis................................................................................6

Recap of the consumer segmentation methodology....................................................................6

Consumer analysis.......................................................................................................................7

Critical evaluation of positioning strategy options..........................................................................9

Positioning strategies...................................................................................................................9

Recommended positioning strategy and implications to non-target groups..............................10

Implementation of the positioning strategy on the price and promotion aspects of the

marketing mix............................................................................................................................10

Creative design..............................................................................................................................11

Conclusion.....................................................................................................................................12
 International consumer behaviour and positioning strategy for Simple 4

Introduction

The new revenue potential attributed to globalization is among the principal objectives for

the proposed expansion of Unilever's Simple brand into the Hong-Kong market. The simple

brand is a U.K.-based skincare product comprising numerous types that include facial

moisturizers, skin health serums, and hydration gels among other products. The expansion of the

Simple brand into the Hong Kong market owes to the globalization of markets which Wild and

Wild (2021) explain as the convergence of consumer preferences. Successful expansion to a

market as concluded by Kimball (2021) necessitates proper analysis of the market to enter as

well as the best strategy to use in market entry. This report provides an analysis of the selected

environmental factors and defines the strategic decisions such as positioning and target market

selection among others.

Evaluation of macro-environment factors impacting brand performance

The factors assessed herein are political, economic, sociocultural, and technological factors

abbreviated as the PEST tool.

The significance of political factors in determining the success of Simple products in Hong

Kong cannot be sidelined. Importation tariff, a significant element of politics plays an important

role in determining the success of the Simple brand in Hong Kong since its effects the price of

the products. Coupled with taxation policies, importation tariffs determine the competitiveness of

the products in the market (Teng et al., 2019). This implies that the rates taxes and other taxation

policies combined with the importation tariffs will determine the brand’s costs of doing business

in Hong Kong and hence impact the potential of the firm to enter the market. High taxes,

stringent taxation policies, and high importation tariffs will discourage the firm from entering the

market and vice versa. The relationships between China and the U.K. play a pivotal role in
 International consumer behaviour and positioning strategy for Simple 5

Simple's expansion to Hong Kong since the acceptance of U.K. products in the Hong Kong

market will depend on these relations. With these political factors, it can be undoubtedly

affirmed that the political factors are significant in Simple’s expansion to the Hong Kong

Market.

Economic factors impacting the expansion of Simple products to the Hong Kong Market

include the country’s inflation, the population’s disposable incomes, and unemployment rates

among other factors. While strategizing on the entry of Simple brand into the Hong Kong

market, these economic factors are crucial and should be considered adequately. The economic

factors determine the performance of the market and subsequently the customer’s economic

status. A country’s economic performance, as explained by Howell and Howell (2008), is a

representation of the citizens’ economic status. While analyzing, unfavourable economic factors

that include high inflation rates, low disposable incomes, and the highest unemployment rates

may insinuate unfavourable business conditions for a business considering entering the market.

Hong Kong's economic factors will, thus, impact how the firm's brand will perform in the market

and hence can be used to inform the market characteristics while planning for entry into the

market. Considering the dependence of the product's success on the economic status of the

country and the customers, the economic facet of the macro-environment is undeniably highly

significant.

The consumption of any product is dependent on its acceptability in the market and hence

must be aligned with the social and cultural norms of the market. The product as Gajjar (2013)

states, should be accepted in the customers' cultures and hence used by the people. While

expanding to the market, therefore, it is important to ensure that people consume these products

in the potential market. Additionally, sociocultural factors such as population stratification also
 International consumer behaviour and positioning strategy for Simple 6

determine the number of potential customers that the firm will get. The culture impacts how the

firm will advertise, the modes of purchasing the products, and the lifestyle of the consumers are

also important facets determining the success of a brand in the market. This makes the analysis

of the same very crucial as it will not only depict the acceptability and potential success of the

product but also inform the mode that the product will be introduced and marketed in the new

markets.

Technological factors play an important role in the supply chain of the products and services

in the market becoming an element that should be factored in during the expansion mechanism.

E-commerce (an element of technology) usage is a factor that determines how the product is

supplied to the end user and hence plays an important role in analyzing the market and entry

strategy. Also, technological advancement impacts the production and supply of these products

in the new market and thus impacts the success of the products. Consequently, technology affects

how the products are marketed in the new market. Marketing is crucial to the success of

products, especially in a new market or for a new product (Khanana et al., 2015). The

significance of marketing and its dependence on technological advancement makes technology a

relevant factor in the macro-environment while Simple is expanding in Hong Kong.

Target market analysis and consumer analysis

Recap of the consumer segmentation methodology

Demographic segmentation was used to arrive at the customer profile developed for Simple’s

products. Demographic segmentation assumes that individuals with common population

characteristics will possess similar tastes and preferences for the products they consume. Simple

products can be categorized as beauty products and hence has a high attraction for the women

group than their male counterparts. On this account, the customers have been segmented on their
 International consumer behaviour and positioning strategy for Simple 7

gender. Consequently, as a moisturizer face wash, the product is more attractive to the younger

generations who are mostly not exposed to other different cosmetics and beauty products. The

simple products, therefore, target young females who are most likely younger than 26 years of

age. This group of individuals, in the current societies, are educated. The segmentation that suits

the identification of the ideal customer profile for Simple products, therefore, is demographic

segmentation.

Consumer analysis

Identification of the consumers is inadequate without the analysis and the motivations,

thoughts, and feelings on why they consume the products. This aids in product improvement as

well as increased targeting. Three factors analyzed herein are consumer attitudes, lifestyle, and

reference groups.

Consumer attitudes play a vital role in forming consumer opinions of the products and hence

consumption. As explained by Ajzen (2018), consumer attitudes are a composite of beliefs,

feelings, and behavioural intentions towards a product or a business. Simple products are

developed to moisturize and improve the skin health of an individual. An analysis of the young

female, including women under 26 years which is Simple's target customers, are cautious of their

beauty. This group of individuals according to the authors seek products that improve their

beauty and esteem, especially after the puberty stage. As a beauty product, there is a high

attraction in girls under the age of 26 years old as they associate themselves with products

improving their skin health and maintaining their beauty. Similarly, the individuals in this group

are inexperienced, or have low experience with cosmetics, and hence resolve for simpler

products as compared to other complex cosmetics such as bleaching agents. Their beliefs will
 International consumer behaviour and positioning strategy for Simple 8

have started forming and aligning themselves to beauty products and hence develop confidence

in products improving or maintaining their skin health.

The lifestyles of the customers in the target consumer group of Simple form a basis for

targeting. Young women in the current generation are educated and exposed by interactions in

their studies and the use of social media. Social media platforms form a basis for interactions

with the people in this category. According to Anderson and Jiang (2018), this young adult age

for females is marked by increased usage of social media platforms. Additionally, the high

internet penetration has increased access to smartphones and other internet-accessing gadgets.

This increases the use of the internet and especially e-commerce platforms. This higher increase

in e-commerce in the current age of globalization has depicted that the younger generation is

using online shopping more than other groups (Wang et al., 2022). This depicts the lifestyle of

these individuals, including the target market for Simple products which is young women under

26 years.

The usage of social media and internet platforms for news articles and sourcing information

among girls below 26 years is high. This implies that this group are impacted by individuals and

personalities on their social media platforms such as influencers, actors, and singers among other

individuals. With this, it can be concluded that the individuals in this group have reference

groups impacting their consumption of products and services. The presence of the internet and

access to massive information creates the formation of reference groups impacting the

consumption of beauty products. The formation of decisions, motivations, and beliefs on beauty

products, their effectiveness, and safety is not based on their personal experience but on the

comparison reference group. This also means that they can make research on the products and

what other people are experiencing and comment on their effects and effectiveness.
 International consumer behaviour and positioning strategy for Simple 9

Critical evaluation of positioning strategy options

Positioning strategies

The positioning strategy options available to Simple brand are FCCP, LCCP, GCCP, and hybrid

strategies. These options are critically evaluated to identify the most suitable strategy that will

increase the product’s success in the new market of Hong Kong.

Using the GCCP strategy attracts consumers on a global scale who will identify themselves

as members of the global segment boosting their self-worth and status. The GCCP strategy also

has the potential to attract a larger market since the product transcends individual national

cultures. These two benefits of GCCP make it an important positioning strategy for

consideration. However, Liu et al., (2017) expound on the ethnocentric cultures that would prefer

cultures woven to their local cultures and hence have a low drive towards purchasing products

with a global culture aspect. Secondly, the use of standardized content globally in GCCP as

stated by Kremers (2015) may limit the purchase by other customers due to differing

interpretations and message meanings.

LCCP appeals to local consumers and attracts nationalistic and ethnocentric consumers

gaining a deep penetration in the specific local market. LCCP products have a high tendency to

penetrate the local markets more due to their identified norms by the local people. LCCP is

however disadvantaged for its localized content meaning the products will not achieve a global

reach and hence have a smaller market.

FCCP is advantageous in attracting the foreign market and giving the market facets of culture

they can associate with, although the product is not local but from another country. This

increases the purchase of the product owing to its relations with the intended foreign market.
 International consumer behaviour and positioning strategy for Simple 10

This strategy, however, has no one-fits-all and hence is restricted to the specific markets and the

individuals relating to the norms and culture designed for the product.

Lastly is the hybrid positioning strategy where at least one positioning strategy is utilized for

a specific product. This strategy is beneficial since it attracts a wide range of consumers as it

couples the norms and culture of the individuals while gaining the advantages of a global

product. The challenge of implementing the strategy however is the difficulties in designing two

strategies which may need various advertising and may not suit all the markets.

Recommended positioning strategy and implications to non-target groups

The Chinese markets as stated by Liu et al., ( 2017) are ethnocentric and have a higher

preference for local cultures and local products while Liu et al., (2016) notes the increase in

consumption of global products. Based on this information, this report recommends the use of a

hybrid positioning strategy comprising LCCP and GCCP strategies in China to increase the

chances of success for the Simple brand in Hong Kong. This will appeal to all the consumers in

the diverse market of China and hence give the Simple brand a fair chance to penetrate the

market. The selected positioning strategy is appealing to all individuals and will not lead to a

negative portrayal by the non-target groups. The acceptance of the strategy among the non-target

groups will increase the chance of success as they will not create negative messages to the

product’s consumers.

Implementation of the positioning strategy on the price and promotion aspects of the marketing

mix

The product will be portrayed as a global product with aspects of cultural attachment to

Chinese culture. This means that the pricing strategy best suited for the products is premium

pricing as the consumers will seek to attach themselves to the global segment with high self-
 International consumer behaviour and positioning strategy for Simple 11

worth and standards. This pricing strategy will be attached to the product’s positioning as a

global brand with a ‘touch’ of Chinese culture. Based on the lifestyle and the high usage of social

media platforms, the promotional method used should have a wider reach and hence the use of

integrated marketing communication tools is recommended. This method will combine the use of

internet marketing, direct sales, sales promotion, advertising, and public relations to propel the

marketing message to the customers and hence achieve a wider reach, increased consumer

acceptance, and consequently lead to the success of the product in the new market.

Creative design

The name Simple is instrumental in explaining the product, especially to the target group

(women below 26 years). The group, having less experience in cosmetics and other beauty

products have a higher preference for simple products and hence 'Simple' portrays a simplicity

they would want to associate themselves with. While assessing the product's marketing design of

the package, the aspect of 'New' written at the top of the product aligns with its positioning

strategy. First and foremost, it depicts its market entry. The global product aspect is emphasized

by the printed website of ‘www.simple.co.uk’ depicting its country of origin (COO). With these

two aspects, being new and having the U.K. as the COO fulfils to be considered as a global

brand and hence have a higher attraction to the consumers in Hong Kong. Also, the use of

English is in congruence with the learned target market and becomes a depiction of the global

brand. This abides by the Congruity theory where the culturally based attitudes and cultural self

can be associated with the Simple products depicting global products.

 International consumer behaviour and positioning strategy for Simple 12

Although the product has no cultural cues linking it to Chinese, the use of LCCP should

inform the introduction of the same as the product enters the market. The use of green colour as a

theme colour for Simple has significance in communicating its eco-friendly nature and hence

carries a global objective which is environmental conservation and protection. This also aligns

with the Chinese objectives adopted from international conventions and national legislation on

the need to keep the environment clean and healthy. Other aspects such as PETA also signify the

‘Animal Test-Free’ which means that no animal has been tested with the product and hence the

firm’s responsibility towards the environment and respect to ecosystems. With creative elements

such as 'New', 'Simple', and 'PETA', Simple is working to communicate with the customers on

the aspects of the products and hence evoke emotional liking of the brand.

The brand intends to signify the safety of its products on the consumer’s skin. This is a

beauty product and hence the motive of the consumer making a purchase is to gain its impact on

their skin care. The product has been labelled ‘Smooth and healthy skin’ and ‘kind to skin’ while

intending to attract the consumer by communicating to them the benefit of the product. The firm

intended to create perceptual selectivity by ensuring that its products communicate the product

characteristics plainly while creating the motive for the customer to purchase the product. By

relating to the customers on their levels of need, the creative design for Simple has justified the
 International consumer behaviour and positioning strategy for Simple 13

use of Maslow’s Motivation Need Theory. This theory is applicable since the firm has ensured

that the motivation of the customer to make a purchase is propelled by the needs which the

product promises to solve. The instruction for use and the benefits for use have been outlined in

the product's packaging hence increasing the information communicated to the customer from

the first instance they interact with the product even before making a purchase (Kaur, 2013).

Conclusion

External environmental factors play a significant role as the plans undertake globalization

strategies. Political, social, economic, and technological factors have been identified as heavy

issues impacting the success of Simple in Hong Kong of the six macro-environmental factors.

The convergence of consumer expectations and the new market revenue potential in expanding

globally are the main driving factors for the expansion of Simple into the Hong Kong market.

After a critical evaluation of positioning strategies, this report has recommended the use of a

hybrid positioning strategy as it will maximize the local ethnocentric individuals as well as the

global culture-loving people. The firms should however increase the use of cultural cues that are

aligned to the Chinese market and hence increase the attraction of the customers who are pro-

LCCP. Better strategies informed by the macro-environment should be developed to ensure the

successful entrance of the firm into the Chinese market.

 International consumer behaviour and positioning strategy for Simple 14

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