(a) Analyze the decision to make a perfume after a cinema star from the

viewpoint of “reference group” behavior.

Answer:

Marketers and advertisers use reference group effects very successfully to

communicate with their customers. Reference groups refers to influencing a

group of individuals behavior, attitude, and values. In which the decision to

make a perfume after a cinema star such as SH is a great idea taking into

consideration that her fans and followers will get influenced by her choices,

and preferences, as buying and using the perfume will make them feel closer

to SH. The company here is depending on the emotional connection between

SH and her fans to advertise the brand.

(b) Examine the risks associated with this kind of decision.

Answer:

Since the company decided to lunch a perfume after a famous cinema star,

they must take into consideration some risks that comes along such

decision.

1. Meeting the fans and followers’ high level of expectations.

2. Maintaining the product quality continuously.

3. Losing customers who are unable to afford purchasing the product.

4. Failure to reach out more new customers or keep the old ones.

5. Maintaining long term brand image.

6. Other competitors aiming same target (consumers who are oriented

towards film celebrities).