A STUDY ON THE IMPACT OF ONLINE ADVERTISING ON PURCHASE

BEHAVIOR OF COSMETIC CUSTOMERS

In partial fulfillment of the Dissertation

In Semester - IV of the (MBA2021-2023)

Prepared by
Harshi Srivastava
Registration No: 2021MMBA008
AAC005

Under the Guidance of Prof. Mrs. Shilpa Chadichal

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Table of Contents

S.NO. TOPIC PAGE NO.

1. Declaration 2

2. Certificate 3

3. Acknowledgement 4

4. Objective of the study 5

5. Abstract 17

6. Introduction 10

7. Literature Review 18

8. Research Methodology 26

9. Findings 31

10. Conclusions 33

11. Plagriasm report 34

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Dissertation Program 4th Sem (MBA2021-2023)

Declaration

This is to declare that the report entitled “To study the impact of online advertising on purchase
behavior of cosmetic customers” is prepared for the partial fulfillment of the Dissertation
course in Semester IV of the MBA Marketing(2021-2023) by me under the guidance of Prof.
Mrs. Shilpa Chadichal.

I confirm that this dissertation truly represents my work. This work is not a replication of work
done previously by any other person. I also confirm that the contents of the report and the views
contained therein have been discussed and deliberated with the faculty guide.

Signature of the Student:

Name of the Student : HARSHI SRIVASTAVA

Registration No: 2021MMBA08AAC005

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MASTER OF BUSINESS ADMINISTRATION

Certificate

This is to certify that Ms. Harshi Srivastava

Regn. No. 2021MMBA08AAC005 has completed the dissertation titled.

‘To study the impact of online advertising on purchase behavior of cosmetic customers’ under my
guidance for the partial fulfillment of the Dissertation course in Semester IV of the MBA Marketing
(2021-2023).

Signature of Faculty Guide:

Name of the Faculty Guide: Prof. Mrs Shilpa Chadichal

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ACKNOWLEDGEMENT

I humbly and gratefully express my overwhelming appreciation to all those who have assisted me
in elevating these ideas beyond simplicity and transforming them into tangible realities.

Secondly, I would like to express my special thanks of gratitude to my professor – Mrs. Shilpa
Chadichal, who gave me this golden opportunity to do this wonderful dissertation project on the
topic "To study the impact of online advertising on purchase behavior of cosmetic customers",
which also helped me in doing a lot of research and i came to know about so many new things for
which I am really thankful to her.

I would also like to express my special thanks of gratitude to all my marketing professors, who
helped me in completing this wonderful project on the topic "To study the impact of digital
marketing on Integrated Marketing Communication and Customers perception” through their
extensive knowledge on this topic.

OBJECTIVE OF THE STUDY

Objective of the study-

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1. To understand the consumption of beauty and skin care products in cosmetic segment.

2. To understand the impact of online advertisement on cosmetic users.

3. To understand which target audience is using the most products in cosmetic.

4. To study what type of advertisement is mostly liked in use and purchase of cosmetic products.

5. To understand the social media usage and consumption timmings by target audience

Category of cosmetic products

To clean, beautify, promote beauty, or otherwise alter the look of the human body, cosmetics and
personal care items are used.
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Cosmetics and personal care items, which include everything from antiperspirants, scents, make-
up, shampoo, and toothpaste to soap, sunscreen, and toothpaste, are crucial in every phase of our
lives.

History of beauty products

It is first useful to consider the past of cosmetics in order to better comprehend the phenomenal
rise of the beauty business. Think of the Ancient Egyptian pharaohs with their thick, dark outlines
around their eyes when you picture the use of beauty and cosmetics items, which historians believe
dates back to 4,000 B.C. This prehistoric eyeliner was formed of pulverised stibnite and was known
as kohl. Early beauty and cosmetic regimens made extensive use of organic components, such as
berries, insects, and charcoal to produce a range of colours.

As European soldiers returned from the Crusades in the Middle East with fresh, exotic goods and
knowledge, cosmetic styles went west. Numerous varieties of cosmetics, which at first were solely
available to royalty and upper-class inhabitants, were among those goods.

The beauty and cosmetics sector eventually saw substantial breakthroughs because of advances in
chemistry and medicine in the seventeenth and nineteenth centuries. The Victorian era in England
saw an increase amidst the quest for beauty and cosmetic products,, though they were still out of
reach for the average person. This was due to new expectations placed on ladies at court to present
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themselves as beautiful and frail, with elaborate clothing and clearly defined facial features. As a
result, eye shadows, lipsticks, nail polishes, and other cosmetics and beauty items have started
becoming popular.

Cosmetic Industry, it's growth, and origin

The availability of beauty items has increased significantly thanks to specialised online sellers,
who have more recently been joined online by reputable companies including big department
stores and conventional brick-and-mortar beauty retailers.

Cosmetic businesses defy government regulation, like most sectors of business. The Food and
Drug Administration (FDA) in the United States does not examine or approve cosmetics, although
it does control the colours that can be used in hair dyes. Cosmetic businesses are not compelled to
report accidents caused by their products.

A growing number of men are utilising cosmetics often associated with women to enhance their
own facial features, even though historically women have used modern makeup more frequently
than men. Men that are interested about their appearance often utilise concealer. Cosmetics
companies are introducing products specifically for guys, and men are utilising them more
frequently. This topic is controversial, though, as many people believe that guys who wear makeup
are disregarding established gender roles and do not see males wearing cosmetics in a positive
light. Others, however, believe that this is evidence of growing gender equality and that men have
the same right to cosmetically alter their facial features as women.

In contrast to the 20th century, the cosmetics market has a different dynamic nowadays. This
economy is being driven by a few nations:

The second-largest market in the globe is Japan. In terms of this market's expansion, Japan's
cosmetic industry has reached a stable stage. The state of the market, however, is rapidly
shifting. Consumers can now access a lot of information Online, you can choose from an
extensive selection of options, creating several opportunities for new players to enter the market
and find ways to satisfy a variety of customer wants. Using the value of shipments made by
brand maker as a measure, the size of the cosmetics market in 2010 was 2286 billion yen. The
market barely changed from the previous year, with a growth rate of 0.1%.
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Russia: One of the most intriguing emerging markets, ranking fifth in the globe in 2012, has
experienced the biggest growth of 21% since 2004, growing to a total of US$13.5 billion.

South Korea: Thanks to its innovations, healthy ingredients, and aesthetically pleasing packaging,
South Korea's cosmetic sector is expanding. The market reached $6.8 billion in 2020, while
COVID-19 cost the market $2.6 billion. France was the greatest exporter, followed by the United
States and Japan, and the total export of goods and trade climbed by 16%. In 2021, fragrances and
hair care products will be the other major imported goods, with skincare products continuing to be
the top import at 34.17 percent.

India : India is rated fourth globally for producing the most money from the personal care and
cosmetics sector in 2022. Several multinational corporations, including Unilever, Procter &
Gamble, and L'Oréal, dominate the cosmetics industry globally. Even though they were wildly
popular in India, homegrown alternatives now compete on an equal basis with newer, organic
brands. Local businesses like MamaEarth, Khadi Essentials Plum, and Soul Tree were able to
capitalize on the opportunity by promoting their home-made cosmetics and personal care products
because multinational firms were unable to meet the demand for items suitable for Indian skin
types.
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Introduction:

This report is prepared to show the impact of digital technology on the cosmetic industry.

India's cosmetics products market is projected to register a CAGR of 4.23% over the next five
years.

The India Cosmetics Product Market is divided into two categories: Product Type (Color
Cosmetics, Hair Styling and Coloring Products), and Distribution Channel
(Supermarkets/Hypermarkets, Specialty Shops, Drugstores, Online Retail Stores, and Other
Distribution Channels).

The business that creates and sells cosmetics is known as the cosmetics industry. These include
hair care products like shampoos, conditioners, and hair colours, as well as colour cosmetics like
foundation and mascara, skincare products like moisturisers and cleansers, and amenities like
bubble bath and soap. Although a limited number of early 20th-century multinational enterprises
dominate the production sector, many different companies are involved in the distribution and
retail of cosmetics. The biggest cosmetic manufacturers include Chanel, L'Oreal, Estée Lauder,
Coty, Nivea, and Shiseido.

Key Players Of Cosmetic Products In India

● Lakme. ● Unilever PLC ● Nykaa.

● Maybelline
● The Procter & Gamble Company ● Himalaya.
● Patanjali. ● L'Oréal.
● Biotique

● Shahnaz Husain
● VLCC
● Coloressence
● Plum
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● Mama's earth
● MAC
● Avon

Digital Marketing Trends In Cosmetic Products

1.1 Digital Marketing: –

Digital marketing is the encompassing process of promoting a brand through digital distribution
channels including web, mobile and other interactive channels. A fundamental advantage of this
form of advertising is its cost-effective model.

Digital marketing can be categorized into pull marketing and push marketing.

Pull
Pull Digital marketing technology requires users to search and retrieve (or retrieve) content directly
through her web search. Good examples are websites/blogs, streaming media (audio and video).
In each of these examples, the user has a specific link (URL) to view the content.

Push
Push digital marketing technologies involve both the marketer (the message producer) and the
users (the recipients). Instances of push digital marketing encompass email, SMS. For the message
to be received in each of these scenarios, the marketer must send (push) the messages to the users
(subscribers).

1.1.2 Designing websites

Using the most recent web design techniques and abilities, everything is done from the early
process of gathering feedback Starting with client inputs, the planning process culminates in final
implementation and testing.. Our services offer the benefit of clarity in design, which is supported
by simple, free-flowing content and the most recent technical know-how.

DIGITAL MARKETING CHANNELS:

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1. SEO (Search Engine Optimization):

Search engine optimization (SEO) is the process of affecting the visibility of a website or a web
page in a search engine's "natural" or un-paid ("organic") search results. SEO may target different
kinds of search, including image search, local search, video search, academic search, news search
and industry-specific vertical search engines.

SEO, as an Internet marketing strategy, considers search engine operations, user search behavior,
keywords utilized in search queries, and the preferred search engines of the target audience. The
process of optimizing a website may entail editing its content, HTML, and relevant coding to
enhance its relevance to specific keywords and facilitate smoother indexing by search engines. In
addition, SEO involves site promotion through tactics like increasing backlinks (inbound links),
social bookmarking, and directory submissions.

2. SEM (Search Engine Marketing ):

Search Engine Marketing (SEM) is an internet marketing approach focused on enhancing

website visibility within search engine results pages (SERPs) through a combination of
optimization and advertising. This involves utilizing Search Engine Optimization (SEO)
techniques to fine-tune website content, aiming for higher rankings in search engine results, as
well as employing pay-per-click (PPC) listings. In pursuit of effective website optimization
through SEM, four key categories of methods and metrics come into play.

Keyword research and analysis encompass three essential steps: first, ensuring that the website
can be easily indexed by search engines; second, identifying the most relevant and popular
keywords for the site and its products; and third, strategically incorporating those keywords
throughout the site to attract and convert traffic. Moreover, keyword analysis and research also
have a follow-on effect known as the search perception impact. This impact relates to how a
brand's search results influence consumer perception, encompassing elements like title and Meta
tags, site indexing, and keyword focus. As online searching often serves as the initial interaction
for potential consumers, the search perception impact significantly shapes the brand impression
for each individual user.

Analyzing website saturation and popularity involves assessing the extent of a website's presence
on search engines. Saturation is determined by the number of site pages indexed on search
engines, while popularity is measured by the quantity of backlinks the site has. To achieve higher
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rankings in search engine results, it is crucial for website pages to incorporate relevant keywords
that align with users' search queries. Additionally, search engines typically consider the quality
and quantity of backlinks as essential factors in determining a website's authority and relevance
within their rankings.

Back end tools, including Web analytic tools and HTML validators, provide data on a website and
its visitors and allow the success of a website to be measured. They range from simple traffic
counters to tools that work with log files and to more sophisticated tools that are based on page
tagging (putting JavaScript or an image on a page to track actions). These tools can deliver
conversion-related information.
There are three major tools used by EBSCO:

(a) log file analyzing tool: Web Trends by NetIQ;

(b) tag-based analytic tool: WebSideStory's Hitbox; and

(c) The transaction-based tool, Tealeaf RealiTea, serves as a valuable asset in the assessment of
websites. By scrutinizing the hidden components of web pages, it identifies potential problems
and numerous usability issues, while also ensuring compliance with W3C code standards. For
a comprehensive evaluation, it is recommended to utilize multiple HTML validators or spider
simulators, as each tool examines, highlights, and reports on distinct aspects of your website's
performance.

4. Whois tools reveal the owners of various websites, and can provide valuable information relating
to copyright and trademark issues.

2.1 Pay per click (ppc):

Pay per click (PPC), also known as cost per click, serves as an internet advertising model
employed to direct traffic to websites. In this model, advertisers compensate the publisher
(typically a website owner) when users click on their ads. In simple terms, PPC represents "the
amount spent to get an advertisement clicked."

In the realm of search engines, advertisers frequently participate in bidding wars for
relevant keyword phrases that align with their target market. Howe ver, content sites take a
different approach by charging a fixed price per click rather than utilizing a competitive bid
system. On these platforms, you'll ofte n come across PPC "display" or "banner" ads strategically
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place d alongside websites or se arch engine results containing re lated content. This arrangeme
nt is possible because the se sites have willingly agre ed to showcase advertise ments.

In contrast to the conventional approach of driving high traffic to a single website, PPC follows
the affiliate model, providing purchase opportunities wherever potential customers may be
browsing. This is achieved by offering financial incentives (a percentage of revenue) to affiliated
partner sites, which direct click-through traffic to the merchant. It operates on a pay-for-
performance basis, meaning the merchant incurs no cost if an affiliate fails to generate sales.

The PPC advertising model is susceptible to abuse through click fraud, though efforts have been
made by platforms like Google to employ automated systems to prevent abusive clicks from
competitors or unscrupulous web developers.

PPC is determined by dividing the cost of advertising with the total number of clicks generate
d by an advertisement. This calculation follows a basic formula.

Pay-per-click = Advertising cost ÷ Ads clicked

Two primary models e xist for determining pay-per-click: flat-rate and bid-based. In both cases,
advertisers must assess the prospective worth of a click from a particular source. This value de
pends on the individuals the advertiser aims to attract as website visitors and the gains they
can achieve from those visits—typically immediate and long-term re venue. Targeting plays a
paramount role in PPC campaigns. Factors such as interests (often observed in search
querie s or browsing content), intent (e.g., purchase intent), location (for geo-targeting), and
browsing be havior all contribute to effective targeting strategies.

3. SMM (Social Media Marketing):

Social media marketing (SMM) has become a crucial aspect of mode rn digital marketing
strategies. As social me dia platforms continue to grow exponentially, busine sses have discovere
d an unparalleled opportunity to connect with the ir target audience, e nhance brand visibility,
and foster meaningful e ngagement. Essentially, SMM e ntails utilizing popular platforms like
Facebook, Twitter, Instagram, Linke dIn, among others. These platforms se rve as channels for
promoting products or services and cultivating direct interactions with customers.

SMM offers a significant advantage in building brand awareness and recognition. By

maintaining a strong and captivating pre sence on social media, busine sses can reach a wide
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audience, ensuring that their brand stays at the forefront of people's minds. Consistent
sharing of valuable content, visually appealing imagery, and company updates establish a
distinct brand identity that se ts businesses apart from their compe titors.

3.1 Engagement

In the realm of the social web, customer e ngagement transforms passive obse rvers into active
participants. Within the busine ss context, social media grants individuals the fre edom to express
the ir opinions and ideas, contributing to the product or service 's journey to market. Each engage
d customer effectively assumes a role within the marke ting department, as their comme nts and
reviews are re ad by potential customers. This process of e ngagement serve s as a crucial
foundation for successful social media marketing, allowing busine sses to cultivate authentic
connections and harness the collective voice of their audience.

3.2 Facebook Marketing

Facebook Marketing has emerged as a vital compone nt of digital marketing strategies e

mbraced by businesses worldwide . With a staggering number of monthly active use rs exceeding
2.8 billion in 2021, Facebook provides an unparalleled platform to conne ct with an
expansive and diverse audience. From local enterprises to multinational corporations,
companies of all scales harness the extensive reach, advanced targeting options, and ve
rsatile advertising formats offere d by Facebook to enhance their brand visibility, foster customer
engage ment, and fuel business growth.

Facebook Marketing offers a distinct advantage through its precise targeting capabilities.
Advertisers can effectively re ach specific demographics by leve raging the platform's advanced
tools, which allow them to de fine their audience based on factors like age, location, interests,
and behaviors. This level of detail ensures that marke ting efforts are strategically aime d at the
right individuals, resulting in maximum impact for each ad campaign.

3.3 Instagram Marketing

In the year of 2022, Instagram marketers will place a significant emphasis on nurturing
relationships with their customers. Their primary focus will be on actively engaging with their
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audience and curating content that fosters meaningful interactions. Research indicates that 35%
of marketers are utilizing the platform for customer service and are reaping high returns on their
investment. Additionally, 30% of marketers have already collaborated with influencers or
creators, while an impressive 42% are planning to initiate influencer partnerships during the
upcoming year. This demonstrates the increasing recognition of the value that influencers can
bring to Instagram marketing strategies.

Industry Segmentation For Cosmetic Products:

In recent years, both internationally and in India, the market for vegetarian, vegan, and cruelty-
free beauty products has flourished.

The current Drugs and Cosmetics Rules now have a new rule, "148-C. prohibition of testing of
cosmetics on animals, such that no person shall use any animal for the testing of cosmetics,"
which was enforced by the Indian Ministry of Health and Family Welfare.

Cosmetics are intended to improve one's appearance (makeup), hide imperfections, accentuate
natural features (such brows and eyelashes), add colour to the face, and can even be used to
completely alter the appearance of the face to resemble another person, animal, or object. The
cosmetics market in India is divided into sections based on product type, category, and
distribution method. The market is divided into categories for colour cosmetics and hair styling
and colouring products based on the type of product. The market is classified into primary
categories, namely hypermarkets and supermarkets, along with specialty shops, pharmacies and
drugstores, online retail stores, and other distribution channels based on their distribution
methods. The market size and forecasts for each segment have been meticulously computed in
terms of value (in USD million).
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Abstract:

Today, social media is one of the best tools used as a process of digital mode helping businesses
or organizations to create mind share, heart share, and market share among individuals.

Social media has e merged as a crucial platform for businesse s to promote their products, exe
rting a significant influence on the cosme tics industry. The power of social media posts lies in
their capacity to raise awareness and reach an extensive global audience of potential clie nts.
When it comes to cosmetic consume rs, marketing initiatives on social media can profoundly
impact brand e quity, value equity, and relationship e quity. This study sheds light on the varied e
ffects of social media marketing concerning consumer perceptions of brand, value , and
relationship equity with cosmetic brands. Additionally, research indicates that both
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connection e quity and value equity play distinct roles in shaping brand e quity and influencing
consumers' intentions to purchase cosmetics.

Literature Review:

Engaging in Social Media Marketing (SMM)

According to Alsaleh, Elliott, Fu, and Thakur (2019); Cham, Lim, Aik, & Thakur (2019); social
media platforms and online communities have made it possible for businesses to interact with
customers in two ways.

Tay, 2016; Cheah, Ting, Cham & Memon, 2019). Social media websites like Facebook and Twitter
give brands and customers additional channels for communication so they may interact with one
another. The development of a company's brand relationship with customers depends on this two-
way communication. When businesses use social media as a channel for communication,
consumers connect and communicate more, develop a stronger bond with the brand, have a more
favourable opinion of it and its products, and frequent brand visits, which increases the company's
profitability. To improve their brand, brands frequently turn to social media.

H1(a)(b)(c)(d): Customer perceptions of (a) relationship equity, (b) value equity, (c) brand equity,
and (d) purchase intention are positively influenced by social media marketing activity.

Indian Context For Cosmetic Industry

According to Alsaleh, Elliott, Fu, and Thakur (2019); Cham, Lim, Aik, & Thakur (2019); social
media platforms and online communities have made it possible for businesses to interact with
customers in two ways.

Tay (2016) and Cheah, Ting, Cham & Memon (2019) have explored the significance of social
media websites such as Facebook and Twitter for brands and customers, providing additional
channels for interactive communication. The establishment of a strong brand relationship with
customers hinges on this two-way communication. Businesses leveraging social media as a
communication channel witness increased consumer engagement, leading to a stronger bond
with the brand, favorable opinions of both the brand and its products, and frequent brand visits,
ultimately contributing to enhanced profitability. Therefore, brands often turn to social media to
enhance their brand reputation and presence.

H1(a)(b)(c)(d): Customer perceptions of (a) relationship equity, (b) value equity, (c) brand
equity, and (d) purchase intention are positively influenced by social media marketing activity.
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Trends in 2023 in cosmetic industry

Cosmetic Rx:

The medicalization of beauty is on the rise as consumers want evidence to support extravagant
claims. By investing in technology to develop ingredients and gadgets that will increase sales,
brands are generating value through ingredients-driven products. The newly introduced goods seek
to create novel ingredients and products through the use of fermentation, biological engineering,
and DNA sequencing. Selfridges London has established the Dr Vali 360 Experiential health
Centre, which offers access to cutting-edge treatments for the skin, face, smile, hair, body, and
health, all of which are delivered by a group of medical professionals. A product called the
Spacetime Hydro Lifting System has been released by Youngmay in China; it combines a needling
device with special serums that resemble mesotherapy. This is intended to aid active compounds'
greater penetration of the skin's top layer for improved performance.

Current Technology:

Through the use of technology at home or in stores, experimentation is boosting engagement. As

technology enables consumers to experience identical results through straightforward methods,
from RFID to digital avatars and the metaverse, offline and online firms are integrating to thrive.
The ability to do virtual shopping from the convenience of one's home has been completely
reimagined thanks to the merging of artificial intelligence (AI), augmented reality (AR), and virtual
reality (VR). These cutting-edge immersive AR/VR applications increase the level of intimacy
between brands and their customers by imitating real-life beauty counters, offering hyper-realistic
virtual makeup try-ons, AI filters, and more. For instance, Colorbar offers a virtual lipstick try-on
service on our website, and the actual stores will also provide this service soon.

Hyper-individualized beauty products:

The saying "one size does not fit all" does not apply to the beauty industry. Consumers are turning
to personalised beauty treatments, formulations, and supplements as skin type awareness grows
since these options let them choose items that are tailored to their particular needs. By choosing
technology-enabled interactions that encourage a highly customised consumer journey, this can be
made easier. For instance, algorithm-powered solutions like interactive quizzes can be
incorporated by cosmetic firms. International companies like Estee Lauder provide virtual skin
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analysis tools on their eCommerce websites to assist customers in determining the ideal skincare
regimen based on their skin type and to provide them with individualised product suggestions prior
to making a purchase.

Value equity, relationship equity, and brand equity

Huppertz, Arenson, and Evans (1978) were the first to apply equity theory in the context of buyer-
seller exchange situations. Since then, the idea of equity in marketing has developed into ideas like
customer equity, which is divided into subcategories by relationship equity, value equity, and brand
equity. It is crucial to take into account the relationship equity between the company and the client
in order to create customer equity. Planning and organising relationship values is necessary for
relationship management (Iyer, Sharma, and Bejou, 2008). Simply put, it is insufficient to produce
things and expect consumers to buy them; rather, a brand must focus on developing relationships
with consumers in order to increase brand loyalty.

Value is what a client expects from a company's goods and services, according to Yuan, Kim, and
Jin (2016). Value is produced via a company's operations and ongoing, engaged consumer
engagement (Kuvykaite & Piligrimiene 2014). Value equity is a result a consumer's unbiased
evaluation of cost-benefit perception based on a brand's utility.

When a product or service corresponds to the consumer's perceptions, value equity has been
achieved.

A name, term, sign, symbol, or design is referred to as a brand. Brand equity was defined by Keller
(1993) as "the marketing effects that are specifically attributable to the brand." Since they are
connected, the brand name gives the product a higher worth or status. SMM initiatives are
anticipated to have an impact on how customers perceive a brand's values.

Purchase Intention for Cosmetics

Purchase intention is defined as the likelihood of customers intending to make a purchase
(Dehghani & Tumer, 2015). The shopper's purchasing intention is based on what they have learned
about the product from their peers or via social media cues. buy intention, according to Kim and
Ko (2012), is the result of pre-buy considerations that may point to a future purchase. When
consumers buy a thing, they anticipate that the product they perceive and the product they receive
will be equivalent. Consumers are more likely to repurchase a product or adopt new items if a
business is effective in establishing brand equity. Therefore, we assumed that:
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H2(a)(b)(c): Consumers' perceptions of a cosmetic brand's (a) relationship equity, (b) value equity,
and (c) brand equity have a favourable impact on their intention to purchase.

Role of brand equity as a mediator -

The importance of brand relationships was ranked at the top of the CBBE pyramid by Keller
(2001), who developed the CBBE model. In order to build brand equity, it is crucial to maintain
the relationship between the consumer and the brand in terms of brand relationship management
(Kuvykaite & Piligrimiene, 2014). Similar to how brand impression is related to value equity,
which is represented at the second highest level in the CBBE model. In light of this, we propose
that social media marketing initiatives by cosmetic brands create relationship equity and value
equity, both of which can favourably raise the perception of brand equity and, as a result, enhance
consumer spending on cosmetics.

In order to explain this, we proposed the following hypothesis:

H3(a)(b)(c): Customers' perception of (a) connection equity, (b) value equity, and (c) brand equity
mediates the association between social media marketing activities and purchase intention among
cosmetic customers.

H4: Among consumers of cosmetics, the perception of relationship equity and brand equity by
consumers mediates the link between social media marketing activity and purchase intention.

H5: Among consumers of cosmetics, the relationship between social media marketing efforts and
purchase intention is mediated by consumers' perceptions of value equity and brand equity.

How Online Advertising Influences Buying Decisions of Cosmetic

Customers?

Online cosmetic ads are highly targeted these days. Whether you're scrolling social media,
browsing your favorite websites, or watching videos, chances are you've seen an ad for the exact
lipstick or skincare product you were just thinking about buying. How do they do that?

Through the power of data. Cosmetic brands collect information about your browsing and buying
habits to determine what products you're most likely interested in. Then they show you ads for
those specific items across the internet. These personalized ads are very influential - studies show
people are more likely to buy a product after seeing an ad tailored to their needs and interests.
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Seeing the same product repeatedly in different places also strengthens your familiarity with the
brand and builds desire. This drip effect of consistent advertising leads to impulse purchases and
unplanned spending. Before you know it, you've clicked "buy now" and that new eyeshadow
palette or wrinkle cream is on its way to your door.

Indeed, not all cosmetic ads lead directly to sales. The primary focus is on bolstering brand
awareness and shaping perceptions. Through the use of captivating models and catchy slogans,
brands aim to embed a sense of glamour, high-quality, or innovation in consumers' minds. This
subconscious impression remains, and when the time comes to make a purchase, their products
naturally appear as the obvious choice.

Whether through retargeting, repetition, or branding, online cosmetic ads are a persuasive force.
By understanding how they influence us, we can make smarter buying decisions and avoid impulse
splurges.

The Psychology of Colors and Images in Cosmetic Ads

Cosmetic companies know that certain colors and images can trigger emotional responses in us
that make their products seem irresistible. They frequently use these psychological tricks in their
online ads to convince us we need the latest lipstick or anti-aging serum.

Vibrant reds, pinks and corals are commonly used for lipsticks and blushes because we associate
them with youth, vitality and sexuality. Cool blues and silvers suggest high-tech, medical-grade
formulas for products like wrinkle creams. Natural greens and browns are relied upon to make
organic or “all-natural” cosmetics appear wholesome and eco-friendly.

Close-up images of flawless, glowing skin and full, pouty lips make us aspire to achieve the same
perfection. Photos of luxury spas, beaches and sunsets are used to help us imagine how relaxed
and rejuvenated we’ll feel using the product. Even the fonts and language chosen in ads are
designed to convey a sense of beauty, status or scientific credibility depending on the brand.

Of course, cosmetic ads also rely heavily on aspirational messaging, celebrity endorsements and
the promise of dramatic results to sell their wares. But colorful, emotive images and clever copy
that tap into our subconscious desires for attractiveness, youth and vitality are equally persuasive
tools for capturing our attention and swaying our purchasing decisions.
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FOMO: How the Fear of Missing Out Drives Cosmetic Sales

FOMO, or the fear of missing out, is a powerful motivator for sales in the cosmetics industry.
Cosmetic companies know that by creating a sense of urgency and scarcity around their products,
they can drive customers to buy out of a fear of not being able to get that product later.

Limited Edition and Holiday Releases

Cosmetic brands frequently release limited edition collections, holiday sets, and collaborations to
create buzz and demand. The knowledge that these products will only be available for a short time
triggers customers’ FOMO and spurs them into purchasing, even if they already have similar
products. The excitement around these limited releases also generates free publicity and hype for
the brands on social media.

Scarcity and Selling Out

Brands will also often limit the quantities of popular products to make them seem more scarce and
desirable. Seeing a product is low in stock or about to sell out activates customers’ FOMO and
convinces them they need to buy it before it’s gone. This is especially effective for cult products
with devoted followings. The possibility of not being able to repurchase a favorite product is a
strong motivator.

Exclusivity

Some higher-end cosmetic brands rely heavily on portraying their products as luxurious and
exclusive. They aim to make customers feel like part of an elite group by using their brand. But
with exclusivity comes scarcity. The idea that not just anyone can have access to these prestigious
products triggers customers’ fear of missing out on this exclusivity and status. This motivates them
to purchase, even at a premium.

In the end, cosmetic companies are highly adept at manipulating customers’ psychology to drive
sales. Playing upon the fear of missing out is one of the most effective ways to motivate customers
to buy, especially in today’s social media-driven world where there is constant exposure to new
products and trends. FOMO is a powerful tool for any brand to have in their marketing arsenal.
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The Importance of Social Media Influencers and Video Content

The success of online cosmetic advertising heavily relies on social media influencers and video
content. Influencers, particularly on platforms like Instagram and YouTube, have cultivated
dedicated communities of beauty enthusiasts who value their opinions and endorsements.
Collaborating with influencers who genuinely appreciate your products presents an authentic and
effective means to reach new audiences.

Cosmetic brands frequently send PR packages to influencers in hopes of earning a shoutout or

product mention to their followers. Influencers will do dedicated reviews, tutorials, and “get ready
with me” style videos featuring new products. Their followers eagerly await to see what’s next on
their favorites list. The key is finding influencers who match your brand’s style and values. Their
followers will likely appreciate the same qualities in the products they promote.

Videos, especially on YouTube, have become a key part of the online shopping experience. Viewers
want to see products in action, with live demonstrations and swatches. Short teaser clips and
tutorials on social media entice people to watch the full video on YouTube, where brands can
include links to purchase the products. Videos also allow brands to be very transparent in showing
exactly how products perform. This helps build trust in the brand and loyalty with customers.

User-generated content like YouTube reviews and Instagram posts from regular customers carry a
lot of weight as well. People trust real-world opinions from others like them. Cosmetic brands
would be wise to repost and engage with their genuine fans on social media. Featuring real
customer photos and shoutouts makes followers feel like part of a community. They’ll be more
inclined to share their own experiences with the brand and spread the word to new potential
customers.

Leveraging social media influencers, video content, and user-generated posts should be an integral
part of any online cosmetic advertising strategy. These authentic interactions and demonstrations
are key to capturing audience attention, building brand trust, and driving sales. Keeping a finger
on the pulse of the latest social media trends will help cosmetic brands stay at the forefront of the
online beauty space.
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How is Technology and Digitization helping the market growth and

distribution of the cosmetic industry?

1.Social media is a source of inspiration for new beauty purchases for 45% of customers.

2.62% of young people explore cosmetic items on social media before purchasing them.

3. YouTube's most well-liked beauty content producer has 24.8 million subscribers.

4. Before they buy, 67% of beauty fans will consult influencers.

Social media and websites are one of the best digital marketing media channels to reach the
customers these days especially when the target are youngsters. The benefits of using these media
channels are more in the respect to find leads along with finding the target audience, delivering
promotions & offers, and delivering enhanced 24*7 customer service.

Research Methodology

Research Objectives:

Objective of the study-

1. To understand the consumption of beauty and skin care products in cosmetic segment.

2. To understand the impact of online advertisement on cosmetic users.

3. To understand which target audience is using the most products in cosmetic.

4. To study what type of advertisement is mostly liked in use and purchase of cosmetic
products.
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Research Method :
The dissertation research paper has involved two methods to collect the data - :

1. Primary Research:

Primary research included making a survey and collecting responses through google docs with a
motive to understand consumer perception of digital distribution mode of cosmetics.The survey
consists of 16 questions, and was targeted to 35 people out of which 16 responded.

The survey link is as below with a set of questionnaires used to take users feedback.

https://forms.office.com/Pages/ResponsePage.aspx?id=DQSIkWdsW0yxEjajBLZtrQAAAAAAAAAAA
AN__jK3Sx5UNEY2VjJKSTdRRTZaOUhPWEI1T0ZBMlpBTy4u

Research Questions:

1. Mention your gender

2. How often you buy cosmetic products?
3. What factors influences you the most while making a decision to purchase cosmetic
products?
4. Are you aware of digital marketing channels?
5. What image does beauty and skincare influencers project to you?
6. Do advertisement through digital channels affects/influences your decision to purchase
cosmetic products?
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7. According to you, what kind of advertisement really influences you the most when it comes
to cosmetic products?
8. How much you actually spend on purchasing cosmetic products?
9. What type of cosmetic products you prefer to purchase more often?
10. What motivates you more to purchase a particular brand of cosmetic product?
11. Do you think expensive cosmetic products are better than cheaper products?
12. How much do you believe in the influence of digital advertisement on your purchase of
cosmetic products?
( 1 being the lowest and 5 being the highest)
13. Which brand of cosmetics do you prefer more?
14. Do you think that digital presence and advertising creates a good value & strong brand
presence about the cosmetic brand ?
15. What is your age?
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 2. Secondary Research -:

Secondary research included a number of various sites, researches, and knowledge collected
through the media and nearby people.

Using SPSS to note the difference & Effects / Conclusion :

Findings:
According to performed analysis, three factors are taken into consideration where,
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1. Dependent variable:

What factors influences you the most while making a decision to purchase cosmetic
products?

Do advertisement through digital channels affects/influences your decision to purchase

cosmetic products?

2. Independent variable :

Mention your gender

Result - The value of Anova is 2.401 which, is less than 5…so we will accept the result of findings
as positive and can conclude that advertising has a greater and a positive impact on the purchase
behaviour of costmetic products.

Description of Research Findings:

1. Online Advertising Exposure:

Rephrase The study re vealed that a significant portion of consumers inte rested in cosmetics
regularly come across online advertise ments. Leading platforms such as social media, se arch
engines, and beauty-oriented websites se rve as the primary channels for e ncountering these ads.
This widespread exposure to online promotions has notably augmented brand visibility and
enhanced awareness among the inte nded target audience.

2.Trust and Credibility:

Rephrase The study uncovered an interesting finding: online advertisements gain more trust from
consumers when they are associated with credible source s, such as respected be auty influencers,
established websites, and user-generated content. In fact, adve rtisements that showcase
authenticity and transparency positively influence consumer trust levels. As a re sult, they not only
drive higher e ngagement but also increase the likelihood of making a purchase.

3. Social Media Influence:

Social media platforms played a pivotal role in shaping the purchasing habits of cosmetic
customers. Through social media advertisements, consumers frequently stumble d upon new
products and brands, igniting their curiosity to explore different offerings and e ventually make
informed purchases.
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4. Effectiveness of Visual Content

Visual content utilize d in online advertisements wields a potent sway over the purchasing
decisions of cosmetic customers. The incorporation of high-quality images and videos, showcasing
product attributes, tangible transformations before and after usage , as well as endorsements from
satisfied users, significantly enhances the ability to captivate consumer attention and effectively
pe rsuade them towards making a purchase.

5. Impulse Buying and Sales Promotions:

Online advertising greatly contributed to impulsive buying be havior among cosmetic customers.
The use of flash sales, limited-time offe rs, and exclusive deals was found to e licit immediate
purchases. Effe ctive utilization of sales promotions and time-se nsitive offers successfully e nticed
customers into making quick purchasing decisions, the reby significantly boosting online sales.

6. Positive Influence on Purchase Decisions:

Online advertising significantly impacted the purchasing behavior of cosme tic customers. A
significant majority of respondents re cognized that online ads influenced their purchase decisions.
The accessibility of product information, customer revie ws, and captivating visuals through online
ads played a crucial role in stimulating their intent to make purchases.
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Conclusion

The secret is out - online cosmetic brands know how to reel you in and get you clicking the 'buy
now' button. With emotionally charged images, personalized product recommendations, and
limited time offers, they tap into your impulse to want the latest and greatest. Now that you know
the tricks of their trade, you can avoid falling for the hype and make more mindful choices about
what you really need. At the end of the day, the power is in your hands to determine what
influences you and impacts your purchasing decisions. You're smarter than any algorithm, so
trust your instincts and don't feel pressured into buying something just because an ad told you to.
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References

Reference sites –

1.

https://www.researchgate.net/publication/333971379_Impact_of_Advertisement_on_Buying_Be
haviours_of_the_consumers_Study_ of_Cosmetic_Industry_in_Ahmedabad_City

2.
https://www.academia.edu/35623164/_Impact_of_Advertising_on_Consumer_Buying_Behavior
_