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Executive Summary
The European market of cosmetics is competitive, and changes in the number of customers can affect the company’s sales significantly. Kiko Milano UK is the division of the Italian brand that controls sales in the United Kingdom. The problem that is faced by the marketing team in this country is a significant decrease in the number of customers interested in products. The report provides an analysis of the problem with the focus on two main external customer groups: online buyers and visitors of stores.
The report also presents the discussion of information that is collected about customers, sources of information, and ways of how marketing specialists can use the collected information to address customer needs. To contribute to solving the problem identified in Kiko Milano UK, it is necessary to recommend conducting online surveys, developing communities in social media, improving the work of the website, and developing the loyalty program, as well as the system of notifications. These approaches are important to increase the number of customers who buy products in stores and online.
Introduction
The market in which cosmetics companies perform is very competitive because of the popularity of make-up and care products among certain groups of customers (Yeh et al. 2010). As a result, international cosmetics companies choose to develop relationships with customers to increase their loyalty and address persons’ needs (Brassington & Pettit 2006; Cesari & Lynch 2011). Kiko Milano is the Italian brand of non-expensive professional cosmetics that operates in 14 countries all over the globe (Kiko Cosmetics 2016). Kiko Milano UK represents the brand in the United Kingdom while supervising local stores and the website.
The intense competitiveness in the UK cosmetics market and the inappropriate implementation of marketing strategies that were developed for the international public led to decreasing the number of customers in the United Kingdom (Kiko Cosmetics 2016). The purpose of this report is to provide the analysis of customer relationships typical of Kiko Milano UK with a focus on the problem of the ‘customer size’ and propose recommendations to improve customer relationships.
The report presents the analysis of key external customer groups, the discussion of information that should be collected to evaluate and address the problem, the description of appropriate sources of information, and the analysis of ways to use the data to improve customer relationships in the company.
Background of the Problem
In the United Kingdom, Kiko Milano faced a problem of reductions in the number of customers who buy products online and in stores located in different regions of the country (Kiko Cosmetics 2016). The negative changes in the customers’ interest in the company’s products can be explained regarding different factors, including the economic ones (Kotler et al. 2013; Kushwaha & Shankar 2013).
However, the reports indicate that the problematic economic situation in the United Kingdom did not influence the market of non-expensive professional cosmetics (Brassington & Pettit 2006; Kiko Cosmetics 2016). Therefore, the main cause of the observed problem is ineffective customer relationships. Certain actions should be taken to improve the relationships with customers in Kiko Milano UK.
Analysis of Findings
This section provides information regarding external customer groups and sources of data that can be used to improve customer relationships with the focus on the needs of the target audience.
External Customer Groups
In the United Kingdom, Kiko Milano works with female middle-income customers aged between 18 and 35 years (Kiko Cosmetics 2016). In this country, it is possible to identify two main external customer groups, the representatives of which are different in terms of approaches to buying Kiko Milano products: online buyers and customers who prefer buying products in brand stores.
It is important to differentiate the customers according to the type of buying behaviour because this factor influences the company’s sales in the United Kingdom (Hollenson 2011). The problem is in the fact that there are only 24 Kiko Milano stores in the country. As a result, a limited number of customers can be addressed regarding traditional retailing. The number of customers who use the Kiko Milano website (the UK version) to buy make-up and care products, as well as accessories, is higher than the number of visitors and buyers in brand stores (Kiko Cosmetics 2016).
Online Buyers
This group is represented by 18-30-year-old females who are active users of the Internet. This group of customers belongs to the low-middle and upper-middle social classes (Kiko Cosmetics 2016). These women are interested in make-up and skincare, and they aim to save their time and money by buying the product proposed by the professional brand (Hosseini & Vavaie 2012).
These women are also ready to share the links to the products they liked, as well as to post comments regarding the quality of cosmetics on different websites (Kiko Cosmetics 2016; Wei, Suzuki & Guo 2011). It is important to address the needs and interests of this external group of customers because it is larger than the group of females who purchase Kiko Milano products in stores.
Customers Visiting Brand Stores
The representatives of this group are mainly 25-35-year-old females who are interested in skincare and make-up cosmetics (Kiko Cosmetics 2016). These women need to test products when they choose items to buy, and they prefer to consult salespersons while buying the product. The atmosphere in the store and the quality of the service can influence the buying decisions of these women (Czinkota, Ronkainnen & Zvobgo 2011; Stokes, Wilson & Mador 2010). This group of customers needs to be discussed in detail because many women prefer to choose cosmetics in stores, and they use the traditional way of buying products.
Information to Collect about Customer Groups
To build effective relationships with different groups of customers, it is necessary to focus on the information that should be gathered concerning this or that group.
Online Buyers
To conclude regarding the expectations and preferences of online buyers, it is important to collect the information that is related to their demographics: age, occupation, location, and the period of being a customer of Kiko Milano UK (Baines & Fill 2014; Kiko Cosmetics 2016). The marketing specialists and managers of Kiko Milano UK should have access to the information regarding buyers’ lifestyle and economic statuses (Brassington & Pettit 2006).
The information related to visiting other online retailers of cosmetics is also important to conclude regarding the competition in the market (Liao, Chen & Hsieh 2011). Also, it is important to monitor choices made by different age groups in this category of customers.
The statistics on the frequency of buying, the made choices, and types of orders are significant to improve the strategy of working with online buyers (Brassington & Pettit 2006). Specialists in marketing should also collect the information regarding the levels of customers’ satisfaction, as well as their complaints or suggestions (Chen, Chen & Lin 2011; Czinkota, Ronkainnen & Zvobgo 2011).
Finally, it is important to collect the information that is related to factors that influence the customers’ decision to buy this or that product to conclude regarding the sources with the help of which potential customers receive the information about the brand because Kiko Milano does not focus on direct advertising (Kiko Cosmetics 2016; Liao, Chen & Hsieh 2011).
Customers Visiting Brand Stores
The information related to customers who prefer buying Kiko Milano products in stores should include the following details: demographics (age, occupation, location, and the period of being a customer of Kiko Milano UK); the typical buying behaviour; the level of satisfaction, suggestions, complaints, and the feedback regarding the salespersons’ services (Kiko Cosmetics 2016).
It is important to concentrate on the demographic features of customers to decide on the expansion of the chain of stores in the United Kingdom. The information on the typical buying behaviour is also important as it is necessary to find out why these women choose to visit physical brand stores, what experiences they have, how often they visit stores, and what choices they make (Cesari & Lynch 2011; Chaffey et al. 2009). The level of satisfaction is important to be measured for customers in any business, and much attention should be paid to the information on buyers’ positive feedbacks and complaints regarding services.
Sources of Information
To collect the information related to the purchasing experience of online buyers and visitors of stores, it is necessary to use the following instruments and sources of data:
- Online surveys.
- Surveys conducted in stores.
- Sales reports that present statistics.
- Records of customers’ complaints or suggestions (online and in stores).
- Results of the marketing study (online and in stores).
- Statistical and marketing reports related to the cosmetics industry in the United Kingdom.
- Statistical and marketing reports related to the development of digital marketing in the UK cosmetics industry.
- Reports of salespersons and web consultants.
- Results of observations.
The review of statistical, business, and market reports is the easiest way to collect the required information. It is rather difficult to gather results of surveys in stores because of the typically low response rate (Chaffey et al. 2009; Chen, Chen & Lin 2011). Still, the response rate for online surveys, including surveys sent via e-mail, is higher. The marketing study can also be discussed as a costly and time-consuming initiative.
Analysis of Ways to Use the Collected Information for Improving Customer Relationships
The information collected with the help of listed instruments and sources of data can be used to improve relationships with customers who belong to different groups or market segments. While concentrating on the relationships with online buyers, marketing specialists and managers of Kiko Milano UK use the collected information to promote the customer-centred marketing strategy (Kiko Cosmetics 2016). Much attention is paid to choices of online buyers, and they receive high-quality online support.
The work with the data collected on customers, their lifestyles, preferences, and suggestions allows for creating the background for the further development of strong relationships (Baines & Fill 2014). Customers are inclined to value the services and products that are developed to address their particular needs (Weber 2009). The impact of market trends should also be taken into account while developing the strategy of interacting with buyers.
At the current stage, the effective approach to building strong relationships with this group of customers means regular online communication. The buyers who use online services proposed by Kiko Milano UK should be informed about available discounts, order options, and new products on time. To effectively update customers on changes in online services and new products, it is necessary to refer to the information collected with the help of online surveys and statistical analysis of customers’ preferences, as well as frequent purchases.
When customers are regularly updated on propositions that are available in the store and notifications are sent according to their interests and needs, their loyalty toward the brand can increase significantly (Gummesson 2011). This principle is followed by Kiko Milano UK, and the marketing strategy is developed regarding the information collected with the help of different methods.
Conclusion
The analysis indicates that Kiko Milano UK has two key external customer groups, and they are represented by females who buy cosmetics online and females who prefer visiting stores. As a result, different types of information should be collected regarding these customers to propose strategies that are most effective to stimulate their buying behaviours. Differences in purchasing behaviours and made choices are studied by marketing specialists regarding the information that can be collected with the help of surveys, observations, and reports.
The analysis of the current situation in the company regarding the use of the provided information to develop customer relationships demonstrates that improvements are necessary, and the used strategy can be changed to address the needs of diverse customers and respond to the market trends. Therefore, the recommendations include the necessity of focusing on the social media and development of the loyalty programme among other approaches.
Recommendations
The segment of online buyers has considerable potential for development and expansion. To increase the number of customers among online buyers, as well as to increase the number of sales, it is important to implement the following approaches to attracting clients:
- It is necessary to conduct online surveys more frequently to monitor changes in customers’ preferences.
- More attention should be paid to promoting the brand in social media, including Twitter, Facebook, Instagram, and YouTube among others. The reason is that, currently, customers prefer to receive much information on new products using these media (Chaffey et al. 2009; Weber 2009).
- It is also necessary to improve the work of the website to calculate statistics regarding orders and complaints automatically (Chaffey et al. 2009; Weber 2009).
- Much attention should be paid for sending e-mails and SMS about new products and discounts.
- Kiko Milano UK should focus on proposing loyalty cards to their customers (Jobber 2007).
- The company should also focus on conducting seminars in beauty studios to promote the products related to the market of professional cosmetics among businesses as customers (B2B relationships).
The provided recommendations can be discussed as appropriate to develop and strengthen the relationships not only with online buyers but also with customers who prefer visiting physical stores where females should be encouraged to provide their e-mails, join communities in social media, and visit presentations.
Appendix A
Kiko Milano, an Italian brand of non-expensive professional cosmetics, was founded by Percassi in 1997 (Kiko Cosmetics 2016). The brand proposes make-up and care products, as well as accessories. Kiko Milano sells products not only in stores but also online. Currently, more than 1350 products are proposed to female customers in 14 countries, including the United Kingdom and the United States (Kiko Cosmetics 2016).
In Italy, Kiko Milano opened 310 stores, and the overall number of stores in the European countries and the United States is more than 760 (Kiko Cosmetics 2016). Online shops operate in more than 30 countries. Kiko Milano UK monitors 24 stores and the online retailing service in the United Kingdom (Kiko Cosmetics 2016).
The mission of the company is to provide females with high-quality cosmetics and beauty products that are available at low prices (Kiko Cosmetics 2016). Therefore, the company proposes a range of unique products whose price is lower than the price of similar items in the market, but their quality is as high as the quality of cosmetics in professional lines. The company’s marketing team pays much attention to investing in research and development to use innovative technologies in manufacturing high-quality products.
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