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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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