Use of Fragrance in the UK
There are many popular fragrances and global perfume manufacturer companies in the United Kingdom and product development and market research have helped these organizations to achieve their desired success. Surveys have been made in the United Kingdom about the use of fragrances and 45% of the total participants claimed that they use fragrances every day (statista.com 2022).
Fig1: Use of Fragrance in the UK
(Source: statista.com 2022)
According to several authors such as Bessièreet al. (2019), PESTLE analysis can be determined as an effective framework or tool that helps to represent the impacts of political, economic, environmental, social, technological, and legal factors on the performance of the organizations. On the other hand, segmentation is known as a process or method of dividing the target market of an organization into several groups of customers with similar behaviors and needs. This paper will shed light on the PESTLE analysis, targeting, segmentation, and position strategies of Penhaligon as a chosen fragrance company.
Penhaligon is known as a 151 years old fragrance brand that introduced its first product, Hamman Bouquet in the year 1872 (penhaligons.com 2022). This fragrance company was created by a Cornish Barber, Henry Penhaligon. This organization has some flagship stores in different locations in the UK and some of them are Regent Street, Kings Road, the Royal Exchange, Mayfair, Islington, Burlington Arcade, and others. Some of the popular products of this perfume company are English Fern, Violetta, Bluebell, Victorian Posy, Lavandula, and others. Penhaligon’s perfume company is now entirely owned by a popular Spanish fragrance and fashion company Puig International SA (penhaligons.com 2022).
Segmentation can help to divide the market of Penhaligon’s company into several groups of potential customers. Segmentation is of four types and these are demographic segmentation, behavioral, geographic, and psychographic segmentation.
According to various authors such as Anet al. (2018), this type of segmentation refers to dividing the customers based on observable differences and different qualities. These qualities can be age, family size, occupation, gender, nationality, religion, and income level. Combining this segmentation with others can help to target customers more effectively.
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Age |
18 to above, Millennials, Gen Z |
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Sex |
Male and Female |
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Location |
Different areas of the United Kingdom (Kings Road, the Royal Exchange, Mayfair, Islington, Burlington Arcade) |
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Economy Status |
The high and middle-income group |
In behavioral segmentation, the market is divided based on the behaviors or habits of the customers, especially regarding the products. Dividing the customers based on their behaviors can help this fragrance company to create messages that cater to those behaviors (Brotspies and Weinstein 2019). Behavioral data or information is important as it helps to convey how an individual interacts with products or brands.
Fig2: Behavioural segmentation
(Source: Created by Author)
Geographic segmentation can be defined as splitting up large markets based on their locations and it is an important segmentation strategy. Identifying the location of the customers may help to better realize the needs or demands of the customers and also help to promote location-specific advertisements. The companies aim to target the customers based on their locations like state, zip code, country, and state.
Demographic segmentation is somehow similar to psychographic segmentation but psychographic segmentation focuses more on emotional and mental factors. These factors help to provide a deep insight into the motives, needs, and preferences of the audience (Gajanova, Nadanyiova, and Moravcikova 2019). As an example, beliefs, lifestyles, attitudes, personality traits, attitudes, and values are some popular psychographic characteristics.
Introduction to Penhaligon Fragrance Company
Penhaligon’s company mainly follows a demographic and behavioral segmentation strategy for targeting more customers and also developing a large customer base. Penhaligon uses personification in its products for attracting a luxury audience.
According to Camilleri (2018), a targeting strategy can be determined as a strategy that helps to select potential customers through various channels and a good targeting strategy may help a business organization to focus more on sales rate, promotional strategy, customer loyalty, and others. Different types of targeting strategies are there such as concentrated marketing, undifferentiated marketing, and differentiated or selective marketing. Among these strategies, Penhaligon company follows a differentiated marketing strategy for targeting all of its potential customers. This strategy helps this fragrance or perfume company to utilize its resources effectively and wisely. On the other hand, Fayvishenko (2018) states that positioning can be defined as a strategy that helps to make an outline what businesses must do for promoting and marketing their products or services to potential customers. In this strategy, the marketing department of Penhaligon’s company creates an image of the products based on their intended audience. It is mainly developed by using place, product, promotion, and price.
Fig3: Positioning strategy
(Source: Created by Author)
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Political factor |
Brexit is one of the key political appearances which generate uncertainty due to the transformations within the UK policies and regulations. The Penhaligon had a wide effect due to various legislation or rules through the administration for perfume brands in the UK. The trade connection between various nations is highly governed by UK political activity. Because of Brexit, the Penhaligon can deal with several challenges as well as restrictions in foreign trade in the upcoming times. The tax rate of any nation is regulated mainly by government measures and transforms in the tax policies. Thus, the transformation by the administration in the product tax rate can decrease the brand’s profitability. |
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Economic factor |
During the Covid-19 pandemic, customer purchasing choices have changed because of the economic or financial crisis people prefer to buy medicine and other essential products instead of perfumes. Penhaligon’s perfumes are expensive. Due to their high-cost people prefer to buy other essential things. Brexit has created specific fluctuation and changes within the currency of the country along with generating inflationary pressures. The business of perfume and fragrance brands is largely affected by the often transformations in the trade rate of the nation. Because of the world economical crisis, the trade rate encounters larger fluctuations and therefore the perfume brand is also impacted. |
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Social factor |
The development of education in the UK along with well-being and health mainly for the consumers has also affected the company of the UK in a good manner. Quick transformations within the customers’ demands for the perfume brand have impacted the business of Penhaligon, The brand is required to invest largely in development and research for aligning the demands and desires of the consumers. |
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Technological factor |
Continuous concentration on “research and development” for establishing software and in house systems has also impacted the brand The use of digital information and data for notifying the business about the determination of new emerging trends in the markets helped the company to provide better products for the consumers. Investment within the latest technology has supported the perfume brand for a decrease of wasted prices and effort that mainly makes Penhaligon much more proficient along with this response towards the consumers. |
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Legal factor |
The fragrance company comprises regulations and policies mostly along with lawful direction for supporting certain compliance through various rules and regulations. 1000 ethical trade audits and surveys have been managed by the company in recent years for ensuring uprightness. |
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Environmental factor |
Zero waste and waste management have been led by the brand for land-filling mainly within the producing sites. A decrease in the utilization of poly containers or bottles has been determined within the brand supply chain by providing some eco-friendly fragrance containers based on the perfumes. The environmental situation changes can negatively affect the perfume brand as it could reduce the productivity level, and also affect the supplier’s activities. The carbon operational emissions have been decreased by “26.9 percent” along with the target of “30percent” through upcoming years in 2025. |
This refers to the series of strategies and actions that an organization utilizes to promote the products and brand in the competitive market. This involves areas of concentration as a section of a broad marketing plan. This also refers to a category that starts as the “Ps” are “Product”, “Price”, “Promotion” and “Placement”. These 4ps are the main elements of this marketing plan.
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Product |
.The organizations pride themselves mainly on the packaging pattern to encase the top quality fragrances, presenting rich as well as intricately planned exteriors to retain and attract a most prosperous audience. Many packaging products convey a tale and age that the perfume has been produced for. For instance, Penhaligons engaged Keepac in 2016 to design product packaging for the new perfume Luna. The company often utilizes personification mainly within its fragrances to attract luxury customers (Punchard, 2022). The personification results in enhanced features of the product’s personality and developed an emotional link with this brand. The tale that motivated that reflector will be observed through the different videos that would be presented on the brand’s social media, it would present the factors that motivate the perfume and generate a background narrative for them. |
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Price |
The marketing mix price or cost variable refers to the company’s pricing policies and strategy which are utilized to define certain pricing models as well as to mainly set costs for services and products. Penhaligon’s must follow and use the “Luxury pricing strategy”, which denotes high mark-ups, restricted availability as well as a few, whether markdowns. This is also observed through the high prices with the top fragrances retailing at “£178 per 75ml” Penhaligon’s. Moreover, these high costs not just enhance revenue but suggest luxury and exclusivity attract a niche customer with extreme disposal income (Marketingweek.com, 2022). To keep alluring a larger -demographic” of best audiences the cost bracket would be placed higher. |
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Promotion |
The company’s use of email marketing strategy is highly effective as “first”, this could be led at understandably defined individuals and target groups. Email messages or texts could be personalized as well as refined to align with the requirements of the customers. Email marketing strategies have constantly been a wide section of this brand marketing scheme concentrating on personalization “RedEye”. Even though “RedEye” is perceived as an external marketing organization concentrating on online and digital platforms, the fragrance brand utilized its information insight to upgrade behavioral emails (Ryan, 2022). This is generally done by direct communication with the customers promoting the products that the customers had already looked at through the online sites and suggesting perfumes from the “Floral note” they must have been shopping for previously. |
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Placement |
The ” Place” this element refers to how a brand or product is delivered to or distributed to consumers. The brand is mainly digital based with almost 15 shops and various concessions and agreements stand with Penhaligon. The company prided itself specifically on its shop appearance as well as enlisted the support of designers to change the shop into a “Jewel case that drawers in shoppers”. Memorable experiences and incidents are crucial within the expensive sector to generate a strong impression and perception with the customers and satisfy the consumer because of the high-cost bracket. Unforgettable experiences and moments were put at the high of the “IE LUXURY barometer 2015” for the preference for the “luxury industry” to transform in 2016 to be most prosperous and also be perceived as an expensive brand ( Retail-week.com, 2022). |
Conclusion and Recommendation
From the above paper, it can be concluded that Penhaligon’s company has many competitors in the UK markets and Jo Malone London is one of its main competitors. Other competitors of Penhaligon’s company are ESPA, Yardley, Floris, Jo Loves, and others. All of these fragrance companies are adopting advanced technologies for attracting more customers and increasing their profit rates. Penhaligon’s company has several outlets in different locations such as Hong Kong, Macau, Singapore, San Francisco, and Paris. It is recommended for Penhaligon’s perfume company to focus more on social media marketing strategy as this strategy can help this organization to attract more customers and accelerate its business growth. Recently, most people are active on different social media platforms such as Facebook, Instagram, Twitter, Pinterest, and others. Therefore, this marketing strategy can help to increase inbound traffic and brand awareness on different social media platforms. With improved visibility, the business of Penhaligon’s perfume company will gain a great opportunity for conversion. Every image, video, and blog post may lead the audience to the company’s website. So, this strategy can improve customer satisfaction and experience. The company can also use a lower pricing strategy, this strategy will support them to attract more new customers, and customers also prefer to buy perfume at the most reasonable and cheap price. The company should produce for all types of customers because of its high price, only rich people can buy their product, if they start to focus on all groups of people and the company will benefit more in the fragrance market and achieve a competitive benefit through this strategy.
References
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Bessière, D., Charnley, F., Tiwari, A. and Moreno, M.A., 2019. A vision of re-distributed manufacturing for the UK’s consumer goods industry. Production Planning & Control, 30(7), pp.555-567.
Brotspies, H. and Weinstein, A., 2019. Rethinking business segmentation: A conceptual model and strategic insights. Journal of strategic marketing, 27(2), pp.164-176.
Camilleri, M.A., 2018. Market segmentation, targeting, and positioning. In Travel marketing, tourism economics and the airline product (pp. 69-83). Springer, Cham.
Fayvishenko, D., 2018. Formation of brand positioning strategy. Baltic Journal of Economic Studies, 4(2), pp.245-248.
Gajanova, L., Nadanyiova, M. and Moravcikova, D., 2019. The use of demographic and psychographic segmentation to create a marketing strategy of brand loyalty. Scientific Annals of economics and business, 66(1), pp.65-84.
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