This report will be based on the organisation ‘MAC Cosmetics’. This report will cover recommendations to improve competitiveness of the company as well as looking over the current environment. To accomplish this a detailed PEST and SWOT analysis will be carried out and analysed. The identification of current target segments for the company will also be carried out and a marketing mix analysis will also be undertaken to see which elements of the mix are most relevant towards the identified target segments.
PEST & SWOT Analysis Political. Tax policies – MAC cosmetics is now sold in more than over 57 countries worldwide so shipping of products will need to be taken into account because of tax policies. (www. prnewswire. co. uk) Product liability insurance – This will be needed for most organisations selling products like this. This will protect the manufacturers if a person was to file an complaint about the product. E. g. Product causing harm. Trade regulations – These laws are placed to ensure a free and competitive economy, so that the best prices, quality and resources will be provided to the consumers.
Economic Consumer spending – MAC has nothing to worry about when it comes to consumer spending as it has been stated “How the average woman spends ?9,000 on make-up in her lifetime”. Make-up will always be an essential. (www. dailymail. co. uk) Investor confidence – MAC is 100% a company which leaves its investors fully confident and draws in interested investors all the time. This is because MAC is placed in over 300 locations and its consumers are not only your average workers but designers and celebrities too. www. pamperyourselfdenver. com) Recession – In times of recession cosmetic companies do not need to worry as it is known that the make-up sales increase as women like to treat themselves and make themselves feel better at times of recession. (www. dailymail. co. uk)
Social Lifestyle changes – No matter what lifestyle or income a consumer has, because of awareness created by the media, consumers will always go for the high quality products even if means spending a couple of pound more. (www. thedailystar. et) Demographics (age/gender) & cultures/religions – MAC’s theme is ‘All ages, all races , all sexes’ this line definitely shows a strong image which wll pull in all consumers. Trends – MAC is known to be one of the biggest trends for all ages because of the celebrities that advertise MAC. MACs latest new celebrities are Lady Gaga and Cyndi Lauper, both different ages, MAC once again catering for all ages. As well as this MAC is frequently advertised in all the magazines. (www. maccosmetics. co. uk) Awareness (Funds) – Another reason why MAC is so popular is because of all the funds that MAC support such as AIDS/HIV.
This can be a very good selling point as the consumers will have the satisfaction of giving back. (www. maccosmetics. co. uk) Technological Delivery – Online store available making it more accessible for their consumers. SWOT Analysis Strengths Leading Brand – MAC Cosmetics is one of the leading brands when it comes to the Hollywood lifestyle (Movies, Music, Theatre), this is why so many people are joining onto the MAC bandwagon day in day out. (www. finance. yahoo. com) Awareness – MAC has 5 programs, Cruelty-free beauty, back to MAC recycling, MAC kids helping kids, MAC AIDS fund and lastly the MAC PRO program.
With all these programs in place it targets a completely different type of audience it will encourage the more anti-make-up consumers. (www. pamperyourselfdenver. com) High Quality – MAC Cosmetics is known for having the highest quality products with the widest range of colours. (www. maccosmetics. co. uk) Customer Loyalty – MAC Cosmetics have ensured customer loyalty because of programs such as the above and because of how the MAC employees have learnt in training not treat their customers as just customers but to help them and make the customers feel that they are getting 100% attention. (www. inkedin. com) Weaknesses Expensive – MAC Cosmetics can be argued to be expensive or not, many think it’s a perfect price for the quality for it and many think it’s over-priced. More sale offers could possibly be undertaken. Opportunities Fashion World – MAC Cosmetics is known for participating in the latest fashions shows/weeks. This is a big opportunity for the company as this is one of the ways of bringing in customers because of the aspiring fashion teens and celebrities. (www. psfk. com) Threats Competition – MACs competitors are companies such as Bobbi Brown, Benefit and Estee Lauder.
MAC is a step ahead as it has it’s celebrity background and numerous awareness programs but these companies could be a nearby threat for MAC. Current Target Segments Demographic/socio-economic segmentation MAC Cosmetics most definitely target the demographic/socio-economic market to the fullest. MAC Cosmetics is a dynamic company which is created for everyone. Rich and poor, old or young, conservative or trendy and even for males and females. MAC Cosmetics have fulfilled this by carrying their ‘All Ages, All Races, All Sexes’ statement across. Although MAC does cater for male and female their female consumers are number one priority.
They target all females from different ages from teens to young women to mothers etc. This is done by all the different lines of make-up they have under MAC. There’s the Barbie colour line and there’s a Viva Glam line both very different both for different audiences. The Barbie line, just by its name will attract the younger age group whereas Viva Glam has a sophisticated look about it and will attract as well as the younger age group the more older women and working women. Once again having these different lines will target people from different backgrounds and lifestyles.
Having celebrities as MACs models also set a standard for the organisation and targeting consumers from different income backgrounds as well. (www. maccosmetics. co. uk) Geographic There are currently more than 100 locations of the company and although they could easily expand the company would prefer not to as they believe that in order to maintain high levels of quality and staying in control is the key to a successful organisation. MAC Cosmetics can be found in their very own stores or counters in outlets such as House of Fraser, Selfridges and Debenhams with all the other Make-Up counters. (www. amperyourselfdenver. com) Psychographic/Behavioural MAC Cosmetics gain their customers loyalty because of the funding they do and awareness they provide. Also the MAC artists/employees are trained to befriend the consumers almost in a way so the consumers will open up to them. Also MAC caters for people with a variety of attitudes. Cosmetics is perceived to be something that only ‘girly girls’ are into but MAC has opened it up much wider and given much more of a variety for the consumers to identify with. Having different cosmetic lines continuously and celebrities and funding opens it up too all consumers.
As these days it is very popular to have ‘being green’ products etc. People are more aware in saving the world and wanting to do anything possible to help that. As a make-up is an essential for women having recycling programs will push them that extra more to continue to go to MAC as that is how the recycling will succeed. Marketing Mix Analysis (Promotion, People & Product) Promotion – Promotion is something that MAC Cosmetics does very well. The types of promotion that can be done are by advertising, public relations, sales promotions, personal selling and direct mail.
Advertisement is done for MAC Cosmetics by billboards, adverts, fashion shows, magazines, celebrities etc. Overall MAC Cosmetics have a very high amount of advertisement which is definitely one of the reasons why MAC has done so well as it has become well known. It was only in 1987 in Toronto when MAC showed off their products at the Festival of Canadian Fashion. In 1991 Madonna was seen wearing MAC products, in 1993 MAC becomes the presenter for ‘Wigstock’ which is New Yorks celebration of culture. The likes of Neve Campbell have worn it in the movie ‘Scream 3’ and even Michael Jackson has indulged in MAC cosmetics.
In 2000 MAC creates another product named ‘Lady Danger’ this was a product to give their entire lady customers a sophisticated girl power feeling. Once again even the names and statements that are alongside MACs products make them sell. These are only just a handful of things that MAC cosmetics have gone through but looking at these shows the versatility MAC has and just how big in the star lifestyle it is. When MAC Cosmetics has been said to be at perfect pricing for the quality it provides why would customers not buy it if they know the likes of Madonna and Michael Jackson have worn it.
MAC Cosmetics also advertise in magazines, mainly fashion magazines, different fashion magazine which are targeted at different audiences therefore MAC Cosmetic being targeted at different audiences. MAC also used personal selling as one of their promotional strategies by training their employees to sell their products not to just wait for a customer to ask for a product but when seeing a customer passing by who looks interested in the products to ask them if they are looking for anything specific to help them or want to try any products on, this is a very simple method because it can cause impulse buys.
Another promotional strategy that MAC Cosmetics use is direct mail. This can be done directly through their website by subscribing for it. This is a good form of promotion as this is especially for MACs devoted customers who wants to know what the latest products are and offers. People – An essential ingredient to any successful business is the people. Hiring the correct staff and training them properly is vital to a company. It can be very easy for consumers to make judgements about buying the product, buying the product in the future or even ever going back into the store because of the attitude they receive from the employees.
The employees should have the appropriate interpersonal skills, attitude and knowledge of service/product. Frank Toscan and Frank Angelo the co-founders of MAC both said that because they themselves couldn’t directly talk to their consumers they wanted to pass down to their employees not to only be there to sell the product but to make the customers feel like they are 100% getting the product they want by the knowledge the employees should have. Forming this bond with the customers will bring them back in and if the customers feel that the employees are actually interested in what they are doing then they will win the consumers loyalty.
Product – When a company introduces a product to the public or are thinking of bringing out a new line, things that need to be taken into account are who the product is aimed at, what benefit the consumers will gain from it, where do they plan to position it and how is it different from the organisations other products or competitors products. MAC Cosmetics market their products excellently as even though they target such a wide range of customers, it works. When MAC bring out any new products its always either aimed at a different target audience or offers something new to the cosmetic industry or at the least their company.
A lot of the products may be similar to other products which are in the cosmetic industry but what makes consumers go to MAC instead of say Bobbi Brown is because of the advertisement that MAC has and the background MAC has. Another reason why MAC products do so well is because of the funding and awareness they provide, MAC Cosmetics was the first cosmetic company to bring this to the counter. (www. pamperyourselfdenver. com) Recommendations “A company may be lucky enough to identify several potential competitive advantages, and it must be able to determine which are worth pursuing. Not all differentiation is important.
Some differences are too subtle, too easily mimicked by competitors, and many are too expensive. A company must be sure the consumer wants, understands, and appreciates the difference offered. ” (www. referenceforbusiness. com) This quote is saying when comparing yourself to potential competitors it is necessary when looking at the advantages to know which ones matter the most. Not all the things that are similar between businesses are important, there will always be similarities especially in the cosmetic industry as everyone is doing the same but just marketed differently or better version or different versions.
It’s not always about the differentiation but as a whole having a successful company is by everything coming together e. g. staff, products, advertising, pricing etc. Short –term – Improvements which could be made for MAC Cosmetics is taking a different route to make-up. Looking at a certain target audience that MAC hasn’t fully catered for could bring in more customers. MAC make-up does cover all audiences and ages but it could cater a little more for the average and below average income worker. Just by more sales etc. nothing permanent as this could decrease sales revenue for the organisation.
Once that audience has been brought in, when bringing prices back to normal, hopefully that target audience will have tried out the products and seen the benefit of them. They may just spend or save that extra couple of pounds to get their luxury products. Medium – term – Getting involved in more fashion shows etc. will shows MACs consumers that it is still the latest craze. Long –term – Getting involved in more Awareness or showing more campaigns of the awareness making it more known will always keep its consumers connected to MAC.
Losing sight of the awareness programs can for some consumers feel like their brand is pushing it to the side therefore the consumers pushing MAC to the side. These are all huge factors of why MAC Cosmetics has done so well so not forgetting these key factors is mandatory. “The simple premise of marketing is that, to be successful, any organisation must understand its customer’s requirements and satisfy them in a manner that gives the organisation an edge over its competitors. ” (Dibb, Page 1) This quote is saying that at the end of the day if an organisation does not understand their market or their product it will show.
To have a successful business it is vital for the company to know and understand its customers and what they want and need and to see if there is that place for them in the market. Overall looking at other cosmetic brands which are at the top MAC has definitely got the upper hand because of the promotional strategies it has used and achieved. To keep it is this way MAC needs to keep its status up of being the first company that helped charity funds, and its status of celebrity lifestyle.
http://www.dailymail.co.uk/femail/article-1256595/Face-value-How-average-woman-spend-9-000-make-lifetime.html 17th march 2010 daily star reporter
http://www.prnewswire.co.uk/cgi/news/release?id=178420 September 6
http://www.pamperyourselfdenver.com/beauty-blog/the-history-of-mac-cosmetics/ BEAUTY BLOG MAY 24TH 2009
http://www.dailymail.co.uk/femail/article-1169541/Make-sales-beat-crunch-women-brave-face.html caroline grant 12th april 2009
http://www.thedailystar.net/story.php?nid=81175 Sayeda Akter 25th march 2009
http://finance.yahoo.com/news/MAC-Cosmetics-Gets-Into-the-prnews-1932916054.html?x=0&.v=1 June 14th 2010
http://www.psfk.com/2006/03/macs_claim_to_f.html guy brighton march 6th 2006