Download - Marketing Report- CK One Summer
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C.K One Summer Perfume
Nikhil Sen
August 2013
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Table of Contents
1.0 Situation Analysis/Current Marketing Mix
1.1 Current Product
1.2 Current Pricing
1.3 Current Distribution
1.4 Current Promotion
2.0 Brand Positioning
2.1 Definition and explanation of Brand Positioning
2.2 Explaining Brand Positioning
3.0 Target Market Identification
3.1 Geographic Segmentation
3.2 Demographic Segmentation
3.3 Psychographic Segmentation
3.4 Behavioral Segmentation
4.0 Conclusion
5.0 Reference List
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1. Situation Analysis
1.1. Current Product
C.K One Summer comes in a 100ml perfume bottle and the fragrance is of refreshing citrus,
fruits, aquatic and aromatic notes. The base features notes of musk and moss, and the bottle
comes in a variety of colors. Generally perfumes are concentrated with “most concentrated-
10% to 25% fragrances and colognes the weakest, with 5% to 7% fragrances.” (SJ Diamond
2010, 1). CK One Summer is available in both cologne and perfume versions. C.K One
Summer comes in various makes and models such as lime green, aquamarine blue and white
versions.
There are clear benefits received by consumers from using this perfume such as to smell nice,
appeal to others and cosmetic appeal. This shows that C.K One Summer is not just intended
for just preventing body odour (for which a deodorant would be enough) but goes beyond this
to enhance the user’s personality and sex appeal. Sometimes, as promotion, consumers are
given free gifts which could be considered as extra products offer.
Customers are generally defined as those who “purchase products for their own or someone
else’s use, while consumers are usually people who use the good or service.”( (Greg Elliott
2012). CK One, like the other products by Calvin Klein, is a product marketed to customers
and consumers, rather than to businesses. Businesses who use fragrance products such as
hotels and spas would be unlikely to prefer this type of high end branded product.
C.K One Summer has been in the Singaporean Market for less than a year but it has already
become very famous in this market. Originally it was launched as a product of the designer
Calvin Klein in 1995 in USA. Price elasticity of demand is usually defined as ‘the sensitivity
of quantity demanded to changes in price’. (Greg Elliott 2012) In this market, CK One
Summer seems to draw customers which are long term and brand-loyal consumers who are
generally price inelastic. Most of the customers of CK One Summer are long term oriented
consumers who are looking for a Speciality limited edition that satisfies their desire for
sensuality in appeal and believe that CK One Summer is the only one that can provide this.
These would have more inelastic demand, because if they can’t find this product they
probably will not accept substitute products as their preference is for only this perfume.
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The packaging and labelling of this product is a large component of the value perceived by
the consumer. C.K One Summer comes in a simple labelled bottle which is transparent. The
logo shows the brand comes from a famous designer which is its speciality compared to other
perfume brands. The color and packaging and labelling also attracts consumers to perceive
this product in a positive way, as it is very different in terms of appearance and differentiates
itself from the product of competitors.
1.2. Current Pricing
Fragrances are divided into two categories according to their price points and distribution
channels. The prestige market is for perfumes sold at higher price points and distributed
exclusively through high end department stores while the mass market is characterized by
much lower price points and distribution through mass merchandizers and even supermarkets.
(Flammia 1990)
C.K One Summer is clearly in the prestige market because it is charging a high price –
typically at $88 for the 100 ml spray, so that high end buyers get attracted to this bottle and
buy from here. CK One is priced at a very high level compared to its cost of manufacture
because it is a newly launched premium designer product. This is using Market Skimming
pricing which is defined as a strategy involving “setting a relatively high initial price-that is, a
price that is high in the range of expected prices for the market. The price is generally set at
the highest possible level that interested consumers will pay for the new product.” (Rix
2011). C.K One Summer does not compete with other brands on price as all other perfume
brands charge the similar prices on their perfume products and these are differentiated brands
that cannot be compared on price alone. Since this is a luxury product, consumers will
probably perceive this as of high quality from the high price charged initially. In fact, because
the benefits are intangible, if the price was not so high, these consumers could even perceive
this as an inferior product.
The high-end perfume market can be described as a state of monopolistic competition.
Monopolistic competition is usually defined as when “each seller attempts to gain a
differential advantage over its competitors.” (Rix 2011). C.K One Summer is selling a similar
perfume to other brands but is essentially trying to attract consumers to perceive a special
difference here. If there is a change in price of this product then of course quantity demanded
of this product changes as consumers do not have perfectly inelastic demand for this product.
Therefore CK One cannot afford to be drastically different in terms of pricing this product
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from competitors as this product is not really necessary for day to day survival. Therefore
C.K One Summer has to differentiate its product, other than directly charging higher prices
than its competitors. For instance, C.K One Summer could try to work with its
advertisements in all various ways.
Branded perfumes are sold in a market where the firm is more of a “price taker”-in other
words the products are priced at levels that are set by the market rather than on a cost-plus
basis because the firm in a monopolistic competition market. In this case, the firm does incur
business costs which is the “sum of the total fixed costs and the total variable cost for a
specific quantity produced” (Rix 2011). Fixed costs is always the “amount that firms pay
while remaining constant regardless of how many items are produced” . Fixed costs include
the cost of advertising C.K One Summer in various media such as newspapers, magazines
and on billboards. Salaries are paid consistently to those people like models and staff hired
for doing their duties here. These costs always remain constant. “Variable cost is incurred in
buying or hiring labour or materials that are directly related to production.” (Rix 2011)
Pricing on “C.K One Summer perfume” products is partly based on costs associated in the
firm and prices generally rise as the costs increase. Variable costs include the cost of raw
materials for producing this perfume as well as hiring labor and paying wages depending on
hours worked.
Generic, Product and Brand Competition exists here with “C.K One Summer”.
Generic Competition is defined when “consumers often have alternative ways to meet their
product needs.” Product Competition is when “Some products are broadly similar, but have
different benefits, features and prices that distinguish them from competing products.” Brand
competition defines “Some products are very similar, offering the same benefits, features and
price to the same target market.” (Greg Elliott 2012).
C.K One Summer charges a similar price to its competitors which are alternative perfume
companies. These perfume companies do not compete on price but they do compete on other
factors. As this is a shopping product, which is “irregularly purchased item that involves
moderate to high engagement with the decision making process” therefore consumers will
buy the product based on product image/ quality and brand features rather than on price.
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1.3. Current Distribution
Consumers are not able to buy CK One Summer directly from the firm, but would have to
purchase from department stores and other distributors. Indirect Distribution is usually
defined when producers “rely on other organizations and individuals to get their products to
end users.” (Greg Elliott 2012). There are a lot of marketing intermediaries in C.K One
Summer “that act in the distribution chain between producers and end user”. (Greg Elliott
2012). The distribution channel involved includes the producers of this C.K One Summer
product, the wholesalers and the retailers. The retailers finally sell the C.K One Summer
products to the end consumers. Consumers always buy these in high end department stores
such as Takashimaya, Robinson’s, Isetan and Metro. These shops have dedicated glitzy
perfume counters with specially trained and glamorous looking sales people who are able to
describe the benefits of CK One Summer and convince the customer to buy them.
The characteristics of CK One Summer that distinguish it from its competitors also has an
influence on the distribution outlets that are selected. This is a strong branded luxury product
that especially appeals to younger people aged 25-29, so the sales counter and location is also
often selected within upmarket malls where young people tend to visit frequently. Also,
young people like to hang around in malls and also could quite likely to have the disposable
income to purchase a perfume they like when they have the impulse to do so. As it is a high
end luxury brand, it is bought by discerning customers who use high-quality products.
C.K One Summer is known as a product for its best quality. The fragrance is a clean and
fresh scent with mild floral notes, which appeals to young people when they sniff test it.
Therefore, often, testers are conveniently and prominently displayed and sales people will
hand out a free trial on strips of paper. It is marketed as a unisex fragrance with appeal to
both men and women.
This product has labelling and packaging that is unique from its competitors. C.K One
Summer Perfume is packaged in a simple, recyclable and transparent bottle and a beige
cardboard box. In fact this company has incorporated slightly different features for each of its
perfume products. This packaging stands out as a simple but elegant design and attracts
educated and wealthier customers who are also environmentally conscious. That is why CK
One Summer is distributed in the boutique upmarket malls rather than in common super
markets.
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CK One Summer is a non-perishable and a consumer non-durable product. Therefore the
distributors can hold stocks of the product without damages for considerable time. However,
there would be an expiry date beyond which the perfume may lose some of its characteristics.
1.4. Current Promotion
C.K One Summer advertises itself in traditional media such as fashion magazines as well as
on TV, billboards, and even on non-traditional media such as the internet. The video
advertisements on TV and billboards show young people (some of whom are celebrities)
using CK One Summer for everyday use rather than special occasions. On the Internet, CK
One Summer is advertised on some sites that name the store to buy it from.
The two videos referenced in this report are from advertisements in the US and in China. (CK
One Summer Ad Campaign 2012) and (CK One Summer- Ad Campaign in Asia 2012)
Both of the promotions are intending to send the same message to consumers. Both
promotions are trying to display the beauty of C.K One Summer by showing the intangible
benefits of using the product and trying to display the speciality of their brand compared to
others. C.K One Summer is trying to use emotional appeal under its theme by showing a
happy celebrity using the fragrance. The happy face displays the real joy through expressions
received from using the fragrance.
This product differentiates from its competitors as such that it is high perceived quality,
glamorous in good looks and this transparent colored bottle appeals greatly to its target
market consumers. The new version of the product currently is made of a fruit flavour “citrus,
watermelon and crushed leaves with cucumber”. Consumers get a seductive appeal that
attracts other peers. The advertisement shows to attract young peers in their advertisement.
The perfume CK One Summer also clearly differentiates itself from other brands that CK had
launched in the past. For instance, CK had launched “Obsession”, a very successful range of
perfumes in the ‘70s, followed by its perfume range called “Eternity” in the ‘80s. In order
that this new range “CK One” should not cannibalize its own sales of these other perfumes,
the target market and the advertising was quite different for each of these brands. So, while
Obsession is a more exotic perfume with sexual overtones (aimed at middle aged or older
women), Eternity had a more sensual appeal (aimed at women with families). CK One in
contrast has a appeal that is both unisex and much younger and casual target audience (such
as teenagers and young adults) than the other two. (references).
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2. Brand Positioning Theory
Brand positioning is when firms use a consistent “name, logo, slogan and/or design” to create
a clearly differentiated image in the consumer’s mind that identifies the product or service as
different from all other competing products. Branding can be a form of self-expression for the
consumer, as it can denote status as well as product quality. Brand positioning is thus a
strategy that allows the firm to manage the consumer’s perception of the product. Also,
branding makes it harder for the consumer to compare two products purely on price because
it is difficult to put prices on benefits associated with the brand such as reliability, reputation
and status.
In the case of C.K One Summer, there are a lot of aspects portrayed that makes its branding
unique compared to other brands. C.K One Summer has its name displayed in clear and large
letters which conveys a simple message to consumers and makes the consumer recall easily
that it belongs to a famous fashion house called Calvin Klein. Also, the term “new fragrance”
on the bottle suggests that that C.K One Summer is a different fresh smelling Special Edition.
Therefore it is easily understandable to them that C.K One Summer is a great perfume to use.
According to Helen M.Caldwell and Deborah Flammia, ( (Flammia 1990), consumer desires
for perfumes that results in repeat purchases are based on “the composition and aura of the
scent”. C.K One Summer is a speciality edition as it is made up of a scent that has musk notes
in the base with fresh citrus fragrance, and aqua blue in color with bubbles glowing. This
makes C.K One Summer so appealing that consumers will buy this perfume for themselves
and probably for their friends repeatedly.
According to Verma (Verma 2009) emotional and rational factors have shown to affect
consumer decision making. This study has shown that there are five emotional appeals
including “thrills, affection, pride, fear and humour.” CK One Summer appeals to the
emotions of the consumer by implying in the advertisements that the user will get included in
the peer group by using the perfume. Therefore CK One Summer has a clear brand
positioning in the mind of the target consumer that helps the consumer to differentiate
between this perfume as distinguishable from all its competing brands from designers such as
Armani, Hugo Boss, or Dolce & Gabbana perfumes.
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3. Target Market Identification
3.1. Geographic Segmentation
C.K One Summer is sold in Singapore as well as all over the world. As it is a global product,
the CK One Summer campaign has some level of standardization in terms of advertising and
all the ad campaigns here are similar to the ad campaigns in US and other regions of the
world. Research has found that residents of Singapore and Hong Kong who are of the
selected target age group (25- 35 years) and income profile for CK One Summer are very
similar to their peers worldwide. This is because Singapore and Hong Kong are global cities
and well connected to the rest of the world. However, there are some special characteristics
of the advertisements in Singapore that appeal to the unique tastes and preferences of Asian
consumers. For instance, in USA there are usually 2 page advertisements that show the
characteristics of CK One Summer on the first page and some related cosmetic
advertisements on the second page. In Asia, the advertisements only show the perfume on
one page. This is because the buying habits of consumers for perfumes in Asia are similar to
the rest of the world, but Asian consumers behave very differently from global consumers
when buying cosmetics. (Victoria Ann SEITZ 2009)
The purchasing behaviour of Malaysians was studied in an attempt to understand Asian
consumer buying behaviour and association of advertising with the tendency to spend and
perceived social statu. (Benjamin Chan Yin Fah 2011). The study found that people in Asia
were willing to spend large amounts on perfume because they perceived that it is associated
with social status. This is important finding for geographic segmentation and targeting
because ad campaigns in Asia for CK One Summer can be accordingly modified.
3.2. Demographic Segmentation
C.K One Summer does its segmentation basis on factors such as age, income level and
demographic category of consumer. C.K One Summer primarily focuses on the target market
of consumers in the 25 to 29 age group. Currently this means that Generation Y, and to some
extent those in the later part of Generation X, are targeted by this brand. The advertising is
also aimed at those in the higher income category or more affluent consumers who can afford
a premium priced luxury branded perfume such as CK One. This group of people is typically
financially independent and also able to afford such a product as they don’t have that many
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financial obligations such as mortgage, children’s education yet. In addition, these are in the
young age segment and into romance.
CK One Summer does not seem to target by ethnicity because these group of people are
relatively globalized and multicultural. In fact, studies have shown that these young people
have similar tastes of perfume even when they belong to different regions of the world, as
they are globally connected. (Victoria Ann SEITZ 2009). So a single advertising theme
showing all the young people of diverse colour and ethnicity is shown in most of the ads.
They also do not differentiate in terms of gender, and both young men and women are shown
using this perfume.
3.3. Behavioural segmentation
From the advertising, it appears that consumers targeted by CK One Summer would be
expected to use the perfume every day for general use, rather than for special occasions. The
young people featured in the advertising are going about their daily activities and social life.
In this class of consumers, perfume is now considered essential for everyday wear, whereas it
was once reserved for luxury and special occasions. This category of consumers is also more
concerned about environment, so they will be happy that the bottle is recyclable glass, the
cover is cardboard, and the packaging looks simple. This is unlike the traditional perfume
boxes made of plastic which are difficult to recycle and end up in landfills. (Gargan 2007)
These are all factors in favour of CK One Summer. These consumers will be relatively loyal
to the brand, and less price sensitive - because once they are convinced they will keep on
buying this perfume.
3.4. Psychographic Segmentation
Branded fragrances are sold in Asia to different categories of consumers. However the
targeted segment for CK One Summer is narrow and focused on young people in their 20’s to
30’s. For instance, a typical segment who buy a lot of branded fragrances in Asia are females
in their 40’s who are professionally and financially successful, and are cosmopolitan
consumers who are willing to try new products. (Victoria Ann SEITZ 2009)
However, the advertisements for CK One Summer do not seem to target these consumers.
Instead, all the advertisements star young Asian or Caucasian men and women who seem to
be in their early to late 20s and who may correspond to the “Experiencers” category of the
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VALS framework. These consumers like to enjoy all that life has to offer and would follow
fashion and fads, and be influenced by their peer group’s purchasing behaviour. They would
spend much of their income on socializing and are likely to buy on impulse. They can be
reached through billboard and TV advertising so the video campaigns would be targeted at
them. As per Roy Morgan Values Segment framework, the targeted consumer is likely to be
young, optimistic, socially aware and willing to experiment. The advertising of CK One
Summer with the by-line saying “CK One, the only one” is likely to attract these consumers
to buy this product along with all their friends. (CK One Summer- Ad Campaign in Asia 2012)
4.0 Conclusion:
CK One Summer is a classic case study of a perfume brand that is clearly positioned in the
mind of consumers in their late ‘20s, as a luxury high-end branded perfume that smells fresh
and summery, and good
5.0 Reference List
Benjamin Chan Yin Fah, Yeoh Sok Foon & Syuhaily Osman. “An Exploratory Study of the
RElationships between Advertising Appeals, Spending Tendency, Perceived Social Status and
Materialism on Perfume Purchasing Behavior.” International Journal of Business and Social
Science, 2011.
Campaign1, CK One Summer Ad. Youtube Video. n.d.
http://www.youtube.com/watch?v=7I_CyeNhUUU (accessed 18 August, 2013).
CK One Summer Ad Campaign . 2012. http://www.youtube.com/watch?v=7I_CyeNhUUU.
CK One Summer- Ad Campaign in Asia . 2012. http://www.youtube.com/watch?v=U1STtuPq06E.
Flammia, Helen M. Caldwell & Deborah. “The Development of American Dominance in Perfume
Marketing.” 1990.
Gargan, Michelle. “Magic Romance on Perfume, Language & Environment.” Language & Ecology
2007, 2007.
Greg Elliott, Sharon Rundle-Thiele & David Waller. Marketing 2nd Edition. John Wiley & Sons
Australia, 2012.
Rix, Peter. Marketing- A Practical Approach. McGraw Hill Australia, 2011.
Verma, S. “Do All Advertising Appeals Influence Consumer Purchasing Decision: An exploratory
study.” Global Business Review, 2009: 33-43.
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Victoria Ann SEITZ, Nabil RAZZOU, Olesia LUPU, Ka Man Carman CHU. “AN ANALYSIS OF US AND
HONG KONG PRINT ADVERTISING .”
http://anale.feaa.uaic.ro/anale/resurse/27_M08_Seitz.pdf, 2009.
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