Beruflich Dokumente
Kultur Dokumente
Table of Contents
Executive Summary.......................................................................................................3
1. Market........................................................................................................................4
1.1 Size of market.......................................................................................................4
1.2 Market Share.........................................................................................................5
1.3 Market Position.....................................................................................................6
1.4 Depth and breadth of product range.....................................................................6
1.5 Positioning of the product.....................................................................................7
1.6 Product life cycle stage.........................................................................................7
2. Competitors................................................................................................................7
2.1 Indirect Competitors.............................................................................................7
2.2 Direct Competitors................................................................................................8
2.3 Size of Competitors..............................................................................................8
2.4 Positioning............................................................................................................9
3. Identification of Target Market(s)..............................................................................9
3.1 Demographics Segmentation................................................................................9
3.1.1 Gender/ Age....................................................................................................9
3.1.2 Income / Occupation.....................................................................................10
3.2 Psychographic Segmentation..............................................................................10
3.2.1 Social class...................................................................................................10
3.2.2 Lifestyle........................................................................................................10
3.2.3 Personality....................................................................................................10
3.3 Behavioural Segmentation..................................................................................11
3.3.1 Benefit Sought..............................................................................................11
3.3.2 Usage rate.....................................................................................................11
3.3.3 Loyalty status................................................................................................11
3.4 Potential Market segment....................................................................................11
4. External Influences...................................................................................................12
4.1 Culture and Subculture.......................................................................................12
4.1.1 Values............................................................................................................12
4.1.2 Adopter Category..........................................................................................13
4.2 Demographics.....................................................................................................13
4.3 Group Influence..................................................................................................13
5. Internal Influences....................................................................................................14
5.1 Needs and Motives..............................................................................................14
5.2 Perception...........................................................................................................14
5.2.1 Exposure.......................................................................................................15
5.2.2 Attention/ Interpretation...............................................................................16
5.3 Learning..............................................................................................................16
5.4 Lifestyle..............................................................................................................17
6. Consumer Decision Making Processes....................................................................17
6.1 Type and Amount of Information and Level of Decision-Making.....................17
6.2 Evaluative Criteria..............................................................................................18
6.3 Shopping for Product..........................................................................................18
6.4 Post purchase dissonance....................................................................................18
6.5 Disposal of Serum...............................................................................................19
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6.6 Loyalty................................................................................................................19
7. Marketing Strategy...................................................................................................19
7.1 Product...................................................................................................................19
7.2 Price....................................................................................................................22
7.2.1 Value-based pricing......................................................................................22
7.2.2 Premium pricing...........................................................................................22
7.3 Promotion............................................................................................................23
7.3.1 Sales Promotion............................................................................................23
7.3.2 Advertising...................................................................................................23
7.3.3 Personal Selling............................................................................................24
7.4 Place....................................................................................................................24
8. Evaluation................................................................................................................24
8.1. Advertisement.......................................................................................................24
8.1.1 Colour...........................................................................................................25
8.1.2 Format...........................................................................................................25
8.2. Future Recommendations..................................................................................25
8.2.1 Product Enhancement and Customer Satisfaction........................................25
8.2.2 Improved Marketing Communications.........................................................26
8.2.3 Improved Purchase Experience....................................................................26
8.2.4 Identifying potential new customers............................................................26
9. Conclusion................................................................................................................27
Appendix......................................................................................................................28
References....................................................................................................................34
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Executive Summary
The intent of this report is to explore and analyse the impact of buyer behaviour on
marketing strategy through the examination of the team’s chosen product- Chanel’s
Ultra Lift Correction Serum. Both the marketing mix framework as well as consumer
behavioural analysis have been done in order to fulfil the said objective.
A short introduction pertaining to the market that Chanel is in, focusing on areas such
as its market size, market positioning, its depth and breadth of product range, as well
as its product life cycle. Chanel’s direct and indirect competitors have been identified
with Dior being its direct and closest competitor.
An analysis of the market segmentation was also done based on the following
profiles: demographics, psychographics and behavioural in relating to women from
the age group of 30-55 years old (target segment). In addition, potential market
segment has been identified as consumers who purchase Chanel’s products such as
bags and shoes.
Consumer decision making process was later conjured based on the type of
information needed, involvement level of consumers, evaluative criteria used in
making a purchase decision, post purchase dissonance and how to keep it to a minimal
level, as well as its usage disposal and customers’ loyalty to the product.
Marketing Strategy on Chanel and Dior have been done based on the 4Ps of its
marketing mix approach - Product, price, place and promotion. Evaluation based on
the consumer behaviour theory and future recommendations based on the marketing
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mix were also done in accordance. Lastly, a conclusion was formulated to bring the
report to a closure.
1. Market
S$ million
2003 2004 2005 2006 2007
2008
Based on the 2008 figures, skincare products make up 31.87% (318.5 / 999.3) of the
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total market share for cosmetics and toiletries. While the focus is on skincare,
different brands are classified differently based on class where Chanel is seen as a
premium brand thus the need to further analyze the premium cosmetic market share.
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S$ '000
2003 2004 2005 2006 2007
2008
From a micro view, premium skin care products make up 41.14% (214,003.6 /
529,219.0) of the total market share for premium cosmetics.
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Market share is based on brand shares which are determined by sales from each brand.
Amidst all the cosmetic brands in Singapore, SK-II has the largest market share of
3.8%, followed by Shiseido with 3.2% and Estee Lauder with 2.9%. Chanel has a
market share of 0.8% which is 0.1% behind its direct competitor, Christian Dior
(Euromonitor International 2009).
Diagram 1
Perceptual mapping
Strong brand image
Chanel
Christian Dior
Estee Lauder
Loreal
Bio essence
The market position for Chanel and its competitors is demarcated by brand awareness
and brand image. Brand awareness is based on the recognition of each brand while
brand image is based on class and superiority. Chanel’s brand extension has allowed it
to achieve worldwide recognition as compared to other brands thus being placed
highly under brand awareness. It is also perceived to have a strong brand image where
it ensures quality and performance thus justifying it as a premium brand.
2. Competitors
The above table shows various brands with products which perform similar functions
as our chosen product-UCL Serum. However, these two brands have different
psychographic groups and price which limit their competition with Chanel.
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Brands Product
Shiseido Super Lifting Formula
Estee Lauder Perfectionist [CP+] Wrinkle Lifting Serum
Cleu de pau Revitalizing Emulsion
Laneige Perfect Renew Essence
Lancôme RÉNERGIE MORPHOLIFT R.A.R.E
Christian Dior Capture Totale- One Essential
Among all these direct competitors listed above, we have chosen Christian Dior as the
main competitor to Chanel due to the many similarities both brands share. Firstly, the
market share for both brands is close to each other where both companies do not have
any sub-brands unlike Estee Lauder and Shiseido. Secondly, both brands are well
established and sell similar skincare products of a similar price range. Thirdly, both
brands sell their products exclusively and do not distribute their products to external
retailers.
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2.4 Positioning
Diagram 2- Perceptual mapping for Anti – Ageing products.
Weak brand
image
Christian Dior is positioning as a high price product with high awareness. It is well
known for its fragrance and luxury fashion apparels. Using the recognition they have
gained over the years from the fashion runway, they have also broadened out to the
cosmetics segment, selling both skincare and makeup products.
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3.2.2 Lifestyle
According to the VALS lifestyle model, the psychographic of the primary target
segment for both products are people who are known to be ‘high achievers’. They are
successful in their career, showing high commitment to their jobs which provide them
with material rewards and prestige. Moreover, this group of people are image
conscious and tend to purchase products whose brand enhances their prestige and
class (Quester et al. 2007).
3.2.3 Personality
Consumers usually choose brands whose personality complements their own. The
brand personalities of Chanel and Dior are usually associated with sophistication
which represents high status and charm. However, in terms of strong representation of
brand personality, Chanel is perceived as a more sophisticated brand as compared to
Dior. Therefore consumers who wish to be seen as classy and prestigious may be
motivated to purchase Chanel products.
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Consumers will remain loyal to the product if it is able to deliver satisfactory results.
With this, they will be more receptive to try the other products under this line which
complements the serum, resulting in more prominent results. Aside from product
loyalty, consumers will stay loyal to the brand so as to perceive status that is
congruent with the classy brand image.
Generally, this potential target segment is classified as innovators and they make up of
the younger consumers. They are open- minded and keen about the latest technology
and will exhibit high willingness to try and test on the effectiveness of the products
which makes them a potential critical target group in the market (Sandberg 2008).
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4. External Influences
4.1.1 Values
According to the research done by Datamonitor to examine consumer attitudes and
behaviors in Asia Pacific, it was found that consciousness about appearance is more
prevalent in society today, emphasizing the self-oriented values of people. This is
known as a visual culture.
Trends Implications
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The above trends indicate that people desire to project a more confident and favorable
image, thus investing more money in beauty and skincare products.
4.2 Demographics
UCL serum is skewed towards female of thirties and above, who fear that age will
catch up on them, thus they are highly concerned about getting wrinkles and sag lines.
This concern means that they are willing to spend money on skin care products.
Chanel has successfully positioned itself as a luxury brand; hence it appeals greatly to
the mature and affluent females who have high purchasing power.
For consumers who regard the behaviours and opinions of reference group members
as constructive knowledge to them are said to have informational influence (Quester
et al. 2007). For instance, some consumers may be highly influenced by the positive
word-of-mouth by opinion leaders to use the product that they recommend. Some
consumers may be influenced in purchasing the product upon seeing the success of
the product on their social groups.
Consumers who use perceived group norms and values as a guide for their own
attitudes, values or self-image, are called identification influence (Quester et al. 2007).
It occurs when some consumers notice an increasing number of their friends or people
in the same social group using UCL, hence inducing them to use the same product.
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5. Internal Influences
Women of age 30-55 tend to be conscious of their image and appearance, and find the
need to upkeep and enhance their appearances which can be aided by UCL serum,
This boosts their self-esteem and self-confidence thus falling under the need for self-
esteem (penultimate level).
5.2 Perception
Perception is peoples’ way of making sense of the world. The process of perception
consists of three stages namely exposure followed by attention and then interpretation
of the stimuli (Refer to Diagram 3).
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Diagram 3
Consumer is deliberately
exposed to Chanel Ultra
correction serum’s
advertisement through
selected magazines.
5.2.1 Exposure
Chanel’s advertisements can mainly be found in women’s fashion magazines only.
This deliberate exposure in limited advertising platforms signifies the brand’s
exclusive image. While Chanel’s cosmetics has its loyal customer base, advertising in
magazines alone is not viable especially with its 2005 - 2008 brand shares below that
of its competitors like Shiseido and its main competitor Dior (Euromonitor
International 2009, Table 7). Furthermore, with the outlook of sales over the next
three years predicted to grow, Chanel should capitalise and broaden its advertising
platforms (Euromonitor International 2009). It can place counters in the exclusive
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Chanel’s boutiques that carries its bags and purses or near to them so as to increase
the awareness of its skincare line to create a larger customer base.
5.3 Learning
The target segment for Chanel Ultra Correction Lift Serum is women from the age
group of 30-55 of years. As a well-established brand, the prices of Chanel’s products
are expensive, hence making it a high-involvement product. High-involvement
products are products that command a higher degree of consideration from consumers
before making their purchase (Baker 2003). In this case, operant conditioning would
be of most relevance. It is most common in high-involvement situations and it
requires trial before the actual purchase. Since the UCL serum requires consumers to
consider it carefully before purchase, product samples should be given out to them for
trial. During trial, consumers get to experience the product and this is likely to induce
their liking towards it. With further positive reinforcements such as entitling
customers to a free gift for their purchase of a certain amount will aid in encouraging
customers to buy the product. In addition, Chanel could also sell the serum at a
promotional price for a certain period which could in turn increase sales and generate
more revenue for the brand.
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5.4 Lifestyle
UCL serum acts as an anti-ageing tool that helps to improve the quality of collagen
and skin elasticity as well as prevent premature ageing or the skin from losing its
lustre and elasticity. The purpose of the serum complements the lifestyle of the target
segment as mentioned below.
The target segment comprises of mainly working adults who lead a busy life. They
have to juggle between both work and family, which could eventually result in
additional stress and premature ageing. Furthermore, the skin’s renewal process slows
down when one gets older thus all these factors contribute to need for anti-ageing
products to maintain their youth and skin elasticity. Due to these reasons mentioned
above, women of these ages are more willing to splurge on expensive products that
encompass the advanced technology and unique ingredients used, as they believe that
these qualities are what differentiate a high-end brand from a regular drugstore brand.
Consumers can use internal or external search for information of the product. Internal
search refers to information in an individual’s learning like past purchase experience
that is stored in the memory and used during the next purchase. However, if internal
search alone is not sufficient to provide a solution, external search which focuses on
external stimuli is necessary (Quester et al. 2007).
Since UCL serum is a specialty and expensive good, consumers engage in a high
purchase involvement where external information search (extended decision making)
is required before a decision is reached. As consumers are highly concerned about
their complexion and appearance, more effort will be made in searching for
information on the product, reducing potential post-purchase dissonance.
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However, as consumers learn more about the brand and its products after sometime,
they slowly develop trust and loyalty, thus likely to move on to limited decision
making, which means selecting a product without seeking information beyond internal
memory, with no other alternatives in consideration.
Since skincare products are high involvement products, consumers can use the
conjunctive decision rule to select the desired brand. Firstly, minimum standards have
to be established, which is based on individual’s subjective views. Those brands that
fail to surpass the minimum standards would have to be eliminated from the choice.
From the table as shown above, consumers are left to choose between Chanel and
Dior, as both surpass the minimum criterion but Chanel will eventually be chosen as it
is superior to Dior in terms of quality and brand image.
6.6 Loyalty
The potential segment differs in its loyalty to the existing product as compared to the
target segment. This is because the potential consumers are characterized as
innovators who are flexible and not loyal to one particular brand whilst the target
segment, with its positive experiences with Chanel is loyal. Brand loyalty should be
used to target the potential segment as loyalty to a brand has a greater effect as
compared to loyalty to a product. By bring loyal to a brand, if one particular product
is not effective, the consumer will find other alternatives within the brand thus
retaining the consumer base. In the case of UCL serum, if it is not as effective, there
are other products from the UCL range which consumers can try. To cultivate brand
loyalty among innovators, innovators must first have a good experience and
impression of Chanel thus marketers need to ensure that service provided should be of
high quality. To further enhance the experience, Chanel can follow up with post-
purchase service such as providing advice and tracking the process of the consumer's
experience.
7. Marketing Strategy
7.1 Product
A product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need of a consumer. Generally, products are
categorised into three different levels respectively to enhance the customer value.
There are the core benefits which represent the most basic level, followed by actual
product and augmented product which helps to enhance the customer value. (Kotler et
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al. 2009, pp. 200-201) Chanel’s lifting serum fulfilled all the three levels by providing
women with a solution to reduce sag lines and retain firmness (core benefits) through
the use of a patented ingredient and latest technology. Chanel strong branding and
exquisite packaging (actual product) further add on to the core benefit of the product.
Moreover, Chanel’s official website provides the consumers with product knowledge
as well as the technique to apply the product which adds on to become augmented
product (Kotler et al. 2009). Another product characteristic of the UCL serum is that it
is a specialty consumer product which is illustrated in Appendix C.
Based on the perceptual mapping shown in Diagram 4, Chanel's strong brand image
and high pricing of its product further explains its characteristics in Diagram 4.
Diagram 4
Perceptual mapping for Anti – Ageing products.
Weak brand
image
As shown in Table 1, we can see that Chanel Ultra correction lift serum and Dior
Capture Totale One Essential have their own patented ingredients and technology to
tackle the problem of sagginess. Therefore, it is very subjective to judge the
effectiveness of the products unless it is personally tested by the individual. Chanel’s
powerful brand image and luxurious packaging which was voted as the most
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prestigious packaging in year 2004 (Herlihy 2005), also plays an important role in
attracting consumers to purchase Chanel products. As the patented ingredient (Bay
Cider PFA) is what differentiates Chanel from Dior, if the Bay Cider Botanical
becomes extinct, it would impede the rapid diffusion of UCL serum.
Table 1
Comparison of products specifications and benefits between Chanel Ultra
correction lift serum and Dior Capture Totale One Essential
Products
Area of comparisons Chanel Ultra correction lift Dior Capture Totale One
serum Essential
Ingredients It contains an It contains the Pearl
exclusive of Longoza
PolyFractionated Centuline
Active ingredient Aminolumine
( PFA) originated Detoxinyle
from Bay Cedar
trees.
Benefits Immediate lifting Eliminates toxins
and shaping effect deep down for a
Protects against double boosting
breakdown of effect
elastin Reactivates cellular
Anti- free radicals regeneration, skin
intensively and
lastingly repairs
itself
Boosts and prolong
the effectiveness of
skincare.
Application Twice a day ( day Twice a day ( day
and night) on face and night) on face
and neck area and neck area
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Source: Ultra Correction Collection & Dior Capture Totale One Essential Brochures
7.2 Price
Chanel incorporates both value-based pricing and premium pricing as their strategy.
Both Chanel and Dior’s pricing strategy are based on the value- based pricing
whereby the price of the products is set based on buyer’s perceptions of product value
rather than the seller’s cost (Kotler et al. 2009). As a well established brand , both
products are of high quality and highly valued by consumers. The UCL serum is an
example of this as it incorporates both the patented ingredient (PFA) as well as the
advanced technology used to develop the product. As these exclusive characteristics
of UCL serum are valued by consumers thus they are willing to pay a high price.
As reflected above, consumers’ beliefs are influenced by both Chanel and Dior’s
pricing strategies. This cognitive attitude affects their buying decision (Refer to
Appendix D).
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However, if both Chanel and Dior’s products were to undergo price reduction, it
might risk eroding their own brand equity. Generally, consumer usually perceives
product of higher price with better quality. Thus, if the price of Chanel and Dior‘s
products were reduced, the targeted segment would not be greatly affected as price is
not as important as compared to quality.
7.3 Promotion
Marketers for both Chanel and Dior have adopted ways to promote their products
based on the values of their target audience. As beauty products enhance appearance,
the quality and reliability are of utmost importance to consumers thus marketers have
focused on quality and reliability.
Giving out free samples of products is one of the sales promotion tools that Chanel
uses. Free samples are usually given out when new products are launched in the
market. This is to create awareness of these new products. By providing free samples,
it shows that Chanel is confident of its products and this is passed on to consumers as
assurance that Chanel products have quality.
7.3.2 Advertising
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Personal selling is done by the beauty consultants who promote the product. They are
equipped with product knowledge to aid in answering the queries of customers. This
has been facilitated by the product training they go through as well as their
experiences with the product. This implicit information can only be conveyed by the
beauty consultants thus based on quality, they are more informative as compared to
other promotional tools.
7.4 Place
Consumers can get their products from the cosmetic counters located in various malls.
Both Chanel and Dior cosmetic counters are usually located near each other in
shopping malls in the city and near to the Central Business District (CBD) which are
highly accessible by the target segment. As the majority are mainly working women,
their offices are usually located at Raffles Place, Orchard or Somerset (CBD). Thus,
by having counters at the various shopping malls near them, it not only increases their
exposure to the product but also aids in the convenience of going down to make their
purchases.
8. Evaluation
8.1. Advertisement
Chanel and Dior use the same advertising medium- magazines. Their advertisements
are usually on women’s magazines such as CLEO and Women’s Weekly. Dior’s
advertising campaign is more effective in targeting the segment based on how it is
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8.1.1 Colour
Both advertisements use mainly black and white which signifies sophistication and
prestige. This is congruent to the brand images that both brands want to portray, which
is associated with the ‘achievers’ category in the VALS lifestyle model that epitomizes
the target segment. While both are similar in color, Chanel’s advertisement is more
effective as black and white is their signature color therefore consumers can relate the
advertisement to Chanel.
8.1.2 Format
Looking at the format of the advertisement, Chanel’s advertisement reflects simplicity
and straightforwardness thus focusing the attention on the message whereas Dior’s
advertisement is more descriptive in nature (Refer to Appendix E). Effort is needed to
‘process the message’ which ‘decreases attention’ to the main focus of the
advertisement (Quester et al. 2007). Based on the high retail price and high purchase
involvement, extended decision making is usually necessary where consumers require
more information on skincare products. This complements Dior’s informative
advertisement where it provides the necessary information about the product. As the
target segment is classified as early majority, they usually seek additional information
about the product before purchase thus Dior’s advertisement is more suitable as
compared to Chanel.
Chanel can enhance the lift serum by increasing its functions and benefits through
increasing the hydration factor. As people age, they are more susceptible to
dehydration therefore by incorporating this additional benefit, women may find this
product even more ideal. This form of product differentiation helps give Chanel an
edge over its competitors. In addition, it helps to justify Chanel’s high product pricing.
Aside from increasing its benefits, Chanel can provide a direct feedback channel
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where its consumers can give suggestions and opinions on the product as well as on
ways to improve the lift serum. According to Gitman and McDaniel (2005), customer
satisfaction is measured by how the company meets or surpasses customer
expectations with its product or service. By allowing consumers to express their
opinions, Chanel can act on these feedbacks which will make customers feel valued
hence fostering good customer relations.
For more efficient communication, Chanel may attempt to text all their listed
consumers on latest product launch or any upcoming promotions or events.
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9. Conclusion
The ever-changing environment causes the attitudes and behaviors of consumers to
change accordingly. Therefore, the constant study of consumer behavior is important
as it helps marketers understand the pre-purchase, actual purchase and post-purchase
patterns of consumers. Marketers also have to consider the situational, internal and
external influences that may affect consumers’ choice of purchase. With these
understandings, marketers are able to develop effective marketing strategies. Without
an effective marketing plan to reach out to its target segment, it will be difficult to
establish a product in the market as well as sustain long-term growth.
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Appendix
Appendix A
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Appendix B
Front view
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Bottom view
Appendix C
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Appendix E
Advertisment of Chanel
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Advertisement of Dior
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References
Baker, MJ 2003, The Marketing Book, 5th edn, Butterworth-Heinemann, Great Britain.
Chanel Ultra Correction 2010, Ultra Correction, Chanel, viewed 12 March 2010,
< http://www.ultracorrection.com/>.
Color Wheel Pro 2010, Color Meaning, QSX Software Pro, viewed 26 March 2010,
<http://www.color-wheel-pro.com/contact.html>.
Gitman, LJ & McDaniel, CD 2005, The Future of Business: The Essentials. Mason,
Ohio: South-Western.
Lwee, M 2010, ‘The Latest in Anti-ageing’, Singapore Press Holdings Ltd, view on 21
March 2010, <http://www.divaasia.com/article/5138>.
Madden, TJ, Hewett, K & Roth, MS 2000, ‘Managing Images in Different Cultures: A
Cross-national Study of Colour Meanings and Preferences’, Journal of International
Marketing, Vol. 8, No. 4, pp. 90 – 107, viewed 18 March 2010, JSTOR.
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