Understanding and Targeting Consumer Behaviour in the Cosmetics

Industry: The Role of Cognitive Decision-Making Styles and Digital

Marketing

Chuchu Gu

IOE- Education, Practice & Society, University College London, London, WC1E 6BT, U.K.

Keywords: Consumer Behaviour, Cognitive Decision Making, Cosmetics, Digital Marketing.

Abstract: Consumer behaviour in the cosmetics industry is shaped by a complex interplay of psychological mechanisms

that influence purchasing decisions. In this rapidly evolving market, rational decision-makers and emotional

decision-makers are more susceptible to dif-ferent digital marketing strategies. Drawing on the Expected

Utility Model and Prospect Theo-ry, this analysis explores how consumers assess costs, benefits, and

perceived gains or losses when choosing products. Digital marketing strategies, particularly through social

media, are examined as tools for aligning with these psychological drivers to foster brand loyalty and stimulate

impulse purchases. The study also underscores the need to consider external factors, such as culture, lifestyle,

and personality, in addition to cognitive influences, to craft more ef-fective and targeted marketing campaigns.

By integrating these psychological insights, makeup brands can better engage both rational and emotional

consumers, enhancing their competitive edge in a dynamic market.

1 INTRODUCTION

The modern cosmetics industry is shaped not only by

its products but also by the values brands represent.

In this rapidly evolving market, consumer behaviour

is driven by both brand loyalty and a desire for

novelty. While 40% of shoppers remain loyal to

trusted brands, 69% are willing to try new products

every six months (Ustymenko, 2023), highlighting a

balance between familiarity and curiosity. This blend

of trust and exploration underscores the complexity

of consumer decision-making, making it crucial for

beauty brands to build loyalty while continuously

innovating for long-term success. Psychological and

cognitive biases play a key role in these purchasing

decisions, influencing how consumers perceive

brands and evaluate products. As technology evolved,

traditional marketing strategies adopted and changed

towards digital marketing (Jangjarat et al., 2023) and

online advertising opportunities grew (Jain et al.,

2024). Big data can now provide valuable insights

into consumer behaviour, preferences, and trends.

This data-driven approach paved the way for

personalised marketing, enabling brands to tailor

campaigns to individual customer needs and interests

(Jain et al., 2024). By analysing data from sources

such as social media, website interactions, and

purchase history about targeted customers,

companies can build a comprehensive profile of their

target audience (Jain et al., 2024), including their

decision-making styles. This provides insight to

creating various strategies to appeal to the style of the

targeted customer, promote brand loyalty and

advertise new products, ultimately shaping consumer

preferences and behaviours, and ensure they stay

relevant in a competitive market. This essay will

explore the Expected Utility Model and Prospect

Theory to analyse their impact on consumer

behaviour in the makeup industry. By examining how

these theories shape individuals' purchasing

decisions, this discussion will highlight the

psychological mechanisms that drive consumer

choices. Additionally, the essay will examine how

digital marketing strategies leverage these decision-

making processes to influence and engage customers

more effectively and give suggestions for potential

marketing techniques.

Gu, C.

Understanding and Targeting Consumer Behaviour in the Cosmetics Industry: The Role of Cognitive Decision-Making Styles and Digital Marketing.

DOI: 10.5220/0014002700004916

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on Public Relations and Media Communication (PRMC 2025), pages 723-728

ISBN: 978-989-758-778-8

723

2 BACKROUND

2.1 Consumer and Marketing

A consumer is defined as any individual who buys

products or services for personal use rather than for

resale (Baptista, 2020). Consumer behaviour is the

study of how individuals make decisions regarding

the purchase and use of products or services.

Understanding this behaviour is essential for

businesses as it helps them effectively meet customer

needs and enhance their offerings. Marketing plays a

key role in analysing the motivations, frequency, and

reasoning behind consumer purchases, which

ultimately guides businesses in creating strategies

that align with customer preferences and expectations

(Gomes et al., 2020).

It is also a multifaceted concept that looks beyond

the act of purchase. It encompasses how people

allocate their resources such as time, money, and

effort, to buy, use, and eventually dispose of products.

This includes the decision-making processes,

motivations, and emotional responses that drive

consumer choices. Lastly, it also examines the post-

purchase stage, where factors like satisfaction,

product use, and the potential for future buying

behaviour come into play (Baptista, 2020).

2.2 The Framing Effect

The way in which a decision is framed or presented

plays a crucial role in shaping people's choices,

sometimes causing them to make inconsistent or

irrational decisions. This is similar to how a shift in

perspective can alter the way a mountain’s height is

perceived, changes in the framing of information can

influence how individuals interpret and evaluate their

options (Tversky and Kahneman, 1981). This concept

can be applied to the field of marketing, suggesting

the way products are advertised, packaged, or

described can significantly impact consumer

decision-making and purchase intention. Purchase

intention is the likelihood of customers buying the

marketised product and can also be used to assess the

success of the marketing campaign (Boateng, 2021).

By carefully creating the presentation of a product,

companies can subtly guide consumers toward

making favourable choices. Therefore, having a deep

understanding of the cognitive processes that underlie

decision-making is essential for businesses seeking to

influence their target audience. By using this

knowledge, companies can strategically shape

consumer perceptions, creating a more positive

attitude toward their products and overall brand

image.

3 RATIONAL DECISION-

MAKERS

3.1 The Expected Utility Model

The Expected Utility Model, explained by Tversky

and Kahneman (1981) is a framework for

understanding decision-making, particularly in

uncertain situations. It assumes that people make

choices by evaluating potential outcomes and

selecting the option that offers the greatest overall

satisfaction, or utility. To calculate expected utility,

each possible outcome is assigned a value

representing its desirability. This value is then

multiplied by the probability of that outcome

occurring. Summing these weighted values gives the

expected utility of a decision, and the option with the

highest expected utility is considered the most

rational choice. The model serves as a guideline for

making logical, consistent decisions by maximising

overall satisfaction based on both the likelihood and

value of different outcomes. Applying the Expected

Utility Model to marketing, consumers are assumed

to make purchasing decisions by logically weighing

the costs and benefits of different options before

choosing the one that provides the greatest overall

value. Companies can use this decision-making

mechanism to target rational decision-makers by

improving the “signals” (Boateng, 2021).

The Signalling theory has been applied across

various fields to explain customer decision-making

(Boateng, 2019). It consists of three main elements:

the signaller (the company), the receiver (the targeted

customer), and the signal itself. The signaller aims to

influence customer perceptions by sharing

information about their brand and product. This

information is created into signals to reassure

customers of their credibility and trustworthiness and

is communicated through different channels to

effectively reach the target audience (Boateng, 2019).

Signals or information which could be created,

reached out to and focused on to target rational

decision-makers include brand identity, brand image,

brand trust, product quality and how the products

align with the targeted consumers’ needs.

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3.2 Establishing Brand Identity

According to Aaker (1996), brand identity is a unique

set of associations that a company aims to create and

maintain, representing the image the company wants

to convey to consumers. When consumers decide

what to buy, they are often influenced by brand-

related visuals such as the brand name, logo, colours,

symbols, and packaging (Shi, 2019). However, brand

identity extends far beyond these visual cues. It

involves the overall perception and associations that

consumers form in their minds about the brand (Shi,

2019). To summarise, a brand’s identity is not just

about its appearance but it reflects how people think,

feel, and connect with it. When a brand has a strong,

clear identity, it helps consumers connect to it both

logically and emotionally, fostering trust and deeper

engagement (Aaker, 1996)

Given that makeup is applied directly to the face,

cosmetic brands may aim to establish an identity

centred on ethics and safety which could be a

significant focus of targeted customers. To build a

strong brand, a company must clearly define what it

stands for and effectively communicate that identity.

For example, a company that prioritises ethical

sourcing and cruelty-free practices can reinforce its

identity through certifications and transparent

ingredient lists, ensuring that consumers recognise its

commitment to safety and ethics. Similarly, brands

that emphasise dermatological testing and clinical

results can build trust by providing factual evidence

of product safety and effectiveness, such as statistics.

This clarity helps build trust with customers, which

strengthens differentiation in the market (Aaker,

1996). A consistent and easily understandable brand

identity, linked to key attributes, is important for

successful communication.

Common communication channels include

advertising and the internet. In the context of digital

marketing, a strategy could be keeping the content

published on the company’s social media accounts

and official websites consistent, by using a consistent

brand voice, visual identity, and core themes. The

repeated creative messaging across these channels

helps reinforce the brand (Ghodeswar, 2008).

Companies could use various signals to convey

brand identity and create a perception of value that

aligns with the consumers' expected utility.

Consumers make purchase decisions by weighing the

costs and benefits of a product, with the brand’s

identity acting as a significant signal that can

influence their expectations of quality, performance,

and satisfaction. The clearer and more consistent the

brand’s identity, the stronger the signal it sends to

consumers. For rational buyers, factual information

such as dermatological backing, lab test results, and

consumer safety certifications plays a significant role

in building trust, which could help reduce uncertainty

and increase the likelihood of purchase, especially in

a competitive market like cosmetics.

3.3 Importance of Brand Image and

Trust

Brand image and trust are key factors in convincing

rational consumers to make a purchase. A strong

brand image, built on consumer experiences and

associations, helps a brand stand out from its

competitors, making it easier for customers to choose

between similar products (Boateng, 2021). When a

brand is seen as reliable and trustworthy, it reduces

consumer uncertainty and boosts confidence in their

buying decisions (Boateng, 2021). The way a brand

is perceived by a customer has a direct impact on

purchase intent (Lee & Lee, 2018), while trust helps

lessen perceived risks and strengthens consumer

confidence (Hong & Cha, 2013). This is especially

relevant as trust is a crucial factor in the cosmetic

industry. Since makeup is applied directly to the skin,

consumers are highly concerned about product safety,

skin compatibility and often look for assurances that

a product is dermatologically tested, hypoallergenic,

or free from harmful chemicals. In connection with

the Expected Utility Model, a positive brand image

and strong brand trust improves the expected utility

of choosing the brand’s product, leading the customer

to choose the specific makeup company over other

similar companies.

If the company has a strong brand identity

already, rational customers using the Expected Utility

Model may not trust it, because it is a company-

driven concept. A powerful way for makeup brands

to communicate their image and trustworthiness in a

more reliable way is through electronic word-of-

mouth (eWOM). This concept promotes the

company’s values and products through existing

consumer’s mouths and consumers often trust eWOM

more than traditional advertising because it feels

more unbiased (Boateng, 2021). For example,

positive online reviews, ratings, and

recommendations on social media about the cosmetic

products, created by actual users can improve

perceptions of a brand and reinforce its reputation.

For rational buyers, especially Gen-Z (Boateng,

2021), the combination of a solid brand image and

trust, together with positive eWOM, plays a important

role in shaping customers’ perception of the brand

and driving purchase decisions.

Understanding and Targeting Consumer Behaviour in the Cosmetics Industry: The Role of Cognitive Decision-Making Styles and Digital

Marketing

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3.4 Quality Is Fundamental

While electronic word-of-mouth (eWOM) can be an

effective tool for informing targeted customers about

the quality of marketed products (Boateng, 2021), it is

equally important to ensure that the product itself

meets high standards. This is especially important for

post-purchase evaluation. If the consumers are

satisfied and the product meets their expected utility,

the consumer is likely to buy it again and recommend

it to others (Peças, 2023). However, if the product

disappoints, the consumer may avoid the brand in the

future and share negative feedback (Tan SueLin,

2010, Gomes et al., 2020). So, maintaining product

quality is vital to prevent any potential harm to the

brand’s image and reputation (Mohebbi et al., 2016).

For a makeup brand, this is especially crucial because

makeup is a consumable product, and consumers tend

to stick with their preferred brands unless they

encounter a problem, which may prompt them to

switch (Gomes et al., 2020). Therefore, while positive

eWOM can boost awareness and influence decisions,

long-term customer satisfaction and success

ultimately depend on consistently delivering high-

quality products.

In combination, the Expected Utility Model and

the Signalling Theory offer a comprehensive approach

to understanding consumer behaviour. By using

signals to communicate key product attributes and

brand credibility, companies can shape consumers'

perceptions of value, influencing their purchase

intention. When consumers receive reliable signals

that a product aligns with their needs or preferences,

their perceived utility of that product increases,

making them more likely to choose it over

alternatives.

In conclusion, the Expected Utility Model and the

Signalling Theory are more suitable for targeting

rational decision-makers who are more likely to be

heavy long-term consumers who rely on social media

for information and are more loyal to brands (Peças,

2023).

4 EMOTIONAL DECISION-

MAKERS

4.1 The Prospect Theory

The Prospect Theory (Tversky and Kahneman, 1981)

explains that people make decisions based on

perceived gains and losses relative to a reference

point, rather than absolute value. One key idea is loss

aversion, meaning people feel the pain of losing

something more strongly than the pleasure of gaining

the same amount. Probability distortion is another part

of the theory, where people tend to overestimate the

likelihood of rare events and underestimate the

likelihood of common ones. Also, the value function

in this theory shows that people react more strongly to

losses than to gains, making them more cautious when

faced with potential losses. This helps explain

behaviours like avoiding risks, hesitating to switch

brands, or responding more to discounts than to added

costs in marketing.

The targeted consumers who use this decision-

making theory are more likely to be emotional and

make decisions based on their subjective feelings, and

are medium or light consumers who are more price-

sensitive (Peças, 2023). Some strategies used to target

the main aspect of loss aversion could be limited-time

offers, Fear of missing out (FOMO) strategies and

User-generated content (UGC).

4.2 Creating Urgency

Time scarcity marketing taps into the psychological

concept of loss aversion by encouraging quick action

to avoid missing out on opportunities. By presenting

limited-time deals, it triggers an instinctive drive to

grab the moment rather than carefully consider the

decision, creating a sense of urgency (Lahoti, 2021).

A temporary price reduction creates a new reference

point, making the original price seem like a loss once

the sale ends. This encourages impulse purchases and

could target emotional decision-makers, especially for

trending makeup products where consumers may feel

pressured to buy before prices go back up. A digital

marketing strategy could be to display a countdown

timer on their website and social media pages,

signalling that the sale is ending soon.

Product restocks with limited availability could be

a FOMO strategy. When a highly popular product or

iconic product is sold out, brands could tease

customers with announcements that the product will

be restocked for a limited time. The exclusivity of the

restock, along with the anticipation of its return, could

make the product even more desirable. Once it is

available again, it sells out quickly, pushing customers

to buy immediately rather than wait and risk missing

out again. Urgency tactics, such as “Only a few left!”

or “Sale ends in 2 hours!”, increase fear of missing out

(FOMO), making consumers more likely to act

quickly to avoid regret or loss.

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4.3 Creating Exclusivity

User-generated content (UGC), such as influencer

reviews and social media recommendations,

reinforces a social reference point. When consumers

see others benefiting from a makeup product, they

may feel like they are missing out on the experience,

increasing their likelihood of purchasing. This could

also be used to advertise limited edition products or

collections, such as special eyeshadow palettes or

lipstick sets, that are only available for a short period.

When influencers or beauty enthusiasts on platforms

like Instagram or TikTok post about the limited

products, their followers who may not have been

aware of the limited-time nature of the collection, are

now exposed to it. Consumers may worry that they

are missing out on the unique experience or the

opportunity to own something exclusive, particularly

when UGC highlights how others are enjoying these

products.

By combining these strategies, makeup brands

create a sense of urgency, social proof, and perceived

loss aversion, driving higher sales and brand

engagement with emotional decision-makers in short-

term sales.

4.4 Other Factors to Consider

While cognitive and psychological decision-making

styles are key influences on purchase intention, other

factors also play a significant role and should be

considered when developing a marketing campaign.

External influences, such as culture, strongly

impact consumer behaviour and purchasing habits,

shaping preferences and brand perceptions.

Additionally, personal factors like lifestyle and

personality affect consumer choices by influencing

what individuals favour and how they allocate their

spending (Gajjar, 2013).

Understanding these broader influences, together

with cognitive aspects, allows marketers to create

more targeted and effective strategies that align with

diverse consumer needs. Therefore, these aspects will

also need to be examined before making marketing

campaigns.

5 CONCLUSIION

In conclusion, understanding consumer behaviour in

the makeup industry requires a nuanced approach that

combines psychological theories, such as the

Expected Utility Model and Prospect Theory, with

strategic marketing techniques. These frameworks

offer valuable insights into how consumers make

purchasing decisions particularly when it comes to

the balance between brand loyalty and the desire for

novelty. While rational decision-makers rely on

signals of brand trust, quality, and consistency,

emotional decision-makers are influenced by urgency

tactics, limited-time offers, and the power of social

proof through User-Generated Content (UGC).

Rational decision-makers can be targeted for long-

term loyalty and emotional decision-makers can be

targeted for new limited products and short-term

sales. These strategies can be achieved through

various digital marketing strategies such as social

media marketing. Additionally, only considering

psychological factors is not enough, other factors

such as culture, lifestyle, and personality must also be

considered to develop a holistic marketing strategy

that resonates with diverse audiences. By leveraging

these psychological and cognitive insights, beauty

brands can better understand, connect, and target

different customers.

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