Marketing Paper – MAC Cosmetics – Product & Place Strategy Analysis

Paper #1 – Product Survey

Founded by Frank Toskan of Canada in 1984, Makeup Art Cosmetics company is one of the few companies which has used innovative PR and unconventional marketing to create a niche for itself without spending millions of pounds in advertising. The company began by giving away their cosmetics to makeup artists that worked with top models and actresses. MAC developed products that helped artists achieve the right look for stage lighting conditions. It is one of the few brands on the market which has colours to match every skin tone and colour. Working on a simple all encompassing Brand Positioning of Makeup for All ages, all races, all sexes, its brand values project MAC Makeup as attitudinally hip, artfully irreverent, dedicated fully to the art of self-decoration and the realization of the Individual.

The brand personality is cosmopolitan, innovative, irreverent, Original, which has almost created a Cult like following. Loved by women of all ages, it is one of the few fashion brands which truly transcend age. (Viral Marketing, November 9, 2007). MAC fits into the classification of consumer products known as “shopping products”. A shopping product is usually more expensive than a convenience product and is found in fewer stores. Consumers usually buy a shopping product only after comparing several brands or stores on style, practicality, price and lifestyle compar-ability.

They are willing to invest some effort into this process to get the desired benefits. There are two types of shopping products: homogenous and heterogeneous. MAC is a perceived as a heterogeneous product because consumers perceive it as being essentially different – for example, furniture, housing, clothing and universities. ( MKTG 200 – Student Edition, 2013. Lamb/Hair/McDaniel) As one of the 25 individual cosmetic brands that are owned by Estee Lauder cosmetics, MAC varies in use and performance and meets the needs of specific market of women with its products. (MKTG 200 – Student Edition, 2013. Lamb/Hair/McDaneil).

From the very beginning the marketing strategy was to created makeup for makeup artists for fashion, movies and theatre. Endorsement through word of mouth was generated by giving away cosmetics to makeup artists who worked with top models and actresses in the early years of the Franks venture. The early adopters are still what gives MAC its solid foundation in the industry. As well over the years, MAC has built a reputation for itself by unconventional and innovative marketing, breaking away from the safe and obvious. This is where they captured the industry professional as well as the upwardly mobile woman who loves fashion and looking good. Through the maturity stage, MAC has transitions beautifully and marketing its brand where it is accepted and loved by women from all social and economic classes.

They have a keen sensitivity to pop culture and helps to guide what they do. Since its philosophy is to create makeup for all ages, sexes and races, it has never shied away from affiliations with controversial artists and personalities that are known the world over (Love to Know Makeup. Michalak, Jodie. www.lovetoknowmakeup.com). MAC is currently in its maturity stage. It is a well received brand that is currently expanding its product presence into other countries outside of the United States. Many of these countries are impoverished, such as Nigeria, but it has not stopped MAC from going against what is considered to be normal to create new clients and expand its market. Because the North America market has been struggling, they felt it was wise to take chance out of the country to capture new markets (Coleman-Lochner, Lauren. 2013).

MKTG 200

Paper #2 – Place Strategy

Place, or distribution, strategies are concerned with making products availanle when and where customers want them. A part of this P – place – is physical distribution, which involves all the business activities concerned with storing and transporting raw materials or finished products. The goal is to make sure products arrive in usable condition at designated places when needed. (MKTG 200 – Student Edition, 2013. Lamb/Hair/McDaniel). MAC uses distinct placement strategies to distribute its product. MAC Cosmetics intensive distribution takes place at mainly all MAC Pro stores, major department stores or international perfumeries, (Nordstorm’s, Dillard’s, Macy’s, Bloomingdales, Neiman Marcus).

This allows them maximum coverage and keeps the product available in every outlet where the potential customers might want to buy it. If buyers are unwilling to search for a product, it’s very accessible. They accomplished this by placing it in the types of stores that their target market frequents. (MKTG 200 – Student Edition, 2013. Lamb/Hair/McDaniel). The only difference between the MAC Pro Stores and the department store counters is the variety of products that are available.

Because MAC was first created to cater to the needs of the make-up industry professionals, it’s lines within the PRO stores cater to those needs. There you will find, pigments, palettes, some primers, air brush machines along with old and new limited edition items that are specific to their store and will not be found at the department store counters. This is the only distribution that MAC uses. They do not use wholesalers, and although many inquire about becoming a wholesalers, they currently only use the aforementioned type of placement for their products.

( MAC Cosmetics Frequently Asked Questions. www.maccosmetics.com) The retail classifications that MAC uses are department and specialty stores. The department stores carry a wide variety of shopping and specialty goods, including apparel, cosmetics, housewares, electronics and sometime furniture. Macy’s, Nordstrom’s, Neiman Marcus, and some of the larger US department stores that carry MAC. On an international level they are carried in perfumeries. (McKelney, Lauren. www.wordpress.com, April 30, 2012. MAC Promotion Proposal) (MKTG – 200, 2013. Student Edition. Lamb/Hair/McDaniel)

After much research I was unable to find the shipping information for MAC. I do know that currently they are unable to ship cosmetics out of the United States to foreign countries and they ask that clients go to the stores nearest to them in their country. Outside of the stores, MAC has a strong on-line presence with clients purchasing products. You can ship same day, next day, two day or just standard mail which takes up to 5-7 business days.

These products are all shipped within the US. The cost of the shipping depends on how soon you want your product to arrive and can range in price from $5.00 to $17.00 for product ranging in price from $0-$50 USA dollars. A standard package over $50 US dollars is free and is minimal cost for same and next day service. (MAC Cosmetics. Shipping & Handling Fee, 2013. www.maccosmetics.com)

MAC ‘s distribution process has worked very well for the company over its 29 year existence. Customer service is there #1 concern, and not just selling the products to women, but making sure they know how to confidently wear them, and wear them well. The make-up artist at the counter is their most valuable asset, the president of the company will brag. It is there one on one approach to the customer that has made it a company that is demanding to be noticed both in and out of the United States. (Estee Lauder News. Company Newsletter, 2013. www.esteelaudernews.com)

Works Cited

1. McKelney, Lauren. www.wordpress.com. April 30, 2012. MAC Promotion Proposal.
2. Belacel, Amel. ISSUU. MAC Cosmetics Brand Analysis.
3. Viral Marketing. www.viralmarketing.com. November 9, 2007
4. MKTG 200. Student Edition, 2013. Lamb/Hair/McDaniel. Page 214, 234-235.
5. Michalak, Jody. Love to Know Makeup (website) Company History MAC Cosmetics.
6. Wikipedia, the free encyclopedia. MAC Cosmetics.
7. Coleman-Lochner, Lauren. (March 21, 2013) Bloomberg Businessweek. With MAC, Estee Lauder Enters Emerging Markets 8. Estee Lauder News, 2013. Company Newsletter. www.esteelauder.com.

Daphine Whitfield
MKTG 200 – Papers 2 & 3
Professor Rich Lewis
September 24, 2013

1. MAC is sold in 66 countries across the globe in 1000 outlets.
2. MAC’s founder says “I don’t have the luxury of communicating with my clients, so therefore my salespeople are the link between my philosophy and their customers.” This is the reason why MAC assistants on shop counters are trained to advice customers on makeup techniques, formulas, and latest trends.
3. MAC is present in 53 stores across UK out of which 8 are MAC’s flagship stores proving the fact that the brand pull is so strong that consumers flock these few stores to buy MAC cosmetics giving it a cult like following.

So when a mass market brand like L’Oreal or a premium brand like Clinique spend millions on advertising, a brand like MAC does it all by inspiring its stakeholders in non intrusive and subtle ways without spending a fortune on advertising.

In 1994 MAC started retail industry’s first charity called MAC AIDS fund. In 1994, Mac was one of the first to bring charity to retail sector. They started MAC AIDS fund for men, women and children affected by AIDS. The same year they launched VIVA GLAM lipstick.

MAC decided that every cent of the selling price of the VIVA GLAM lipsticks would go to the M·A·C AIDS Fund. VIVA GLAM’s first lipstick was red in colour which symbolizes the fight against AIDS/HIV throughout the world.

With a total of six shades of Viva Glam lipstick and two shades of Viva Glam ‘lipglass’ now sold worldwide, and through the annual Kids Helping Kids Card Program, M·A·C Cosmetics has provided over $95 million (US) to date for the M·A·C AIDS Fund. MAC pays for the ads and its production, the packaging, the shipping and of course their lost profit margin out of their own pocket.

It worked wonders for the MAC brand as the offer was refreshingly straightforward “Every cent of the selling price of MAC Viva Glam Lipstick and Lipglass is donated to the MAC AIDs Fund to support men, women and children living with HIV and AIDs.”

MAC holds Viva Glam gala and fundraiser annually to raise funds for its charity and VIVA GLAM lipstick has become one of the fashion world’s most glamorous and successful fundraising initiatives of all time.

From the beginning the brand has targeted the premium segments with its pricing. Regular introduction of new trendsetting ranges and colours kept the excitement alive like the latest one is ‘Antiquitease’ inspired by antique look.

MAC has done some Periodic ads featuring unlikely celebrities such as flamboyant entertainer RuPaul and Elton John. In 1995,RuPaul was signed to a modelling contract for MAC cosmetics, making him the first drag queen supermodel. M.A.C has never shied away from affiliations with controversial artists.

PR strategies used by MAC:

Apart from traditional media, MAC regularly gives out new launched products to be reviewed by various beauty websites and beauty blog owners which is one very powerful SEO tool and increase the credibility of the brand. A few examples are as below:

http://beautybanter.blogspot.com/2007/10/praying-to-god-of-mac.html

Off late MAC has started heavy usage of PPC advertising. Search for cosmetics or any beauty related term on the Internet and you can see MAC all over the Internet.

Marketing Tactics used by MAC over time:

1. Halloween: 25 different looks for Halloween—from ghoulish to feminine to downright scary— highlighted on its Web site,Maccosmetics.com and at all M.A.C. counters.
2. Back to MAC: “Because we share your commitment to the environment, M·A·C accepts returns of its primary packaging through the Back to M·A·C Program. By returning six M·A·C primary packaging containers to a M·A·C counter or M·A·C Cosmetics Online, you receive a free M·A·C Lipstick of your choice as our thanks to you.
3. Barbie colours cosmetics line of cosmetics: MAC has teamed up with Mattel to launch a Barbie line. The line is intended for adults, and comes with its own limited-edition MAC-themed Barbie doll
4. Temporary websites dedicated to a particular new launch like http://www.barbielovesmac.com/
5. BoomBox – BoomBox is London’s first free for all Fashion Club in East London. BoomBox isn’t serious, posey or full of egos; it’s fun, inclusive and unpretentious club unlike fashion which is meant to be exclusive. The fashion ethos at BoomBox is simple: if all else is luxury brands, don’t try and compete – be different, be brilliant on your own terms, create something out of nothing and feed off the sense of community surrounding you. Its frequented by fashion celebrities and is said to have revived London’s fashion scene and London Fashion Week. MAC has tied up with it in smart way by selling MAC and BoomBox co-branded T-Shirts.

Promotion of Apparel and Home Furnishings Promotion Campaign Report

1. Executive Summary:

This promotion plan for MAC Cosmetics seeks to improve the innovative promotions that MAC is already implementing and add new ideas to the mix. The overall goal of the plan is to get MAC to its full potential through the use of fresh advertising and marketing techniques that will fully showcase the company’s many unseen strengths. The MAC brand has many different opportunities in its current field and target market and can be further pushed to its entire capability to achieve a wider range of consumers.

Other opportunities for MAC include using new forms of advertising to reach new cohorts of consumers, showing how MAC can transition from a daytime look to a nighttime look, and, of course, implementing most of MAC’s current promotions in a new and improved way. MAC’s new promotion plan will use its current strengths to its advantage and help redirect the brand so the strengths do not pose any sort of threat to its overall success. MAC’s competitors range from drug store makeup brands to higher end, more luxurious brands. MAC’s position relative to its competitors is extremely important to the future of the company and its promotions.

MAC has always been seen as a more expensive and more avant-garde brand. Through this new promotion plan, the company will be repositioned to reach more consumers that might have been scared to try MAC products due to its perceived extravagance. The target market for MAC Cosmetics will experience some changes with this new promotion plan as we strive to include a more conservative, mature consumer. While redirecting this brand, the plan will work to keep the original target market by simply using tactics to appeal to a broader range of individuals.

The new promotion plan for MAC will focus on print advertising, direct mail, and interactive advertising. The plan is to focus on MAC’s current promotions and further develop these ideas into successful marketing tactics. This new plan will add a new look to the print advertisements that MAC is already executing, send out direct mail-outs to customers to develop more brand loyalty and appeal to new consumers, and introduce the concept of interactive media to the brand through smart phone applications, interactive store kiosks, and mall events.

2. Preliminary Research:
2.1 Current Marketing Plan

Frank Toskan founded MAC Cosmetics in 1984 (“The MAC Cosmetic,” 2007). He was a photographer from Canada who wanted to invent a cosmetic product that was more artistic and achieved the right look for stage lighting conditions. The cosmetics company is one of the few brands on the market that has colors for all skin tones. MAC has created over 160 lipsticks and 150 eye shadows to date, while also creating limited edition lines (“The History behind,” 2006). According to Viral Marketing “The Brand personality is cosmopolitan, innovative, irreverent, original, which has almost created a Cult like following.

Loved by women of all ages, it is one of the few fashion brands which truly transcend age (“The MAC Cosmetic,” 2007).” MAC’s current promotion plan is to portray this personality to their niche market through word of mouth, which Toskan did so by giving the products to top notch make up artist who work with models and actresses. Through this MAC has built a well-known reputation for itself with using very little advertising. In 1994, once MAC’s name had become better known, MAC started a new charitable promotion plan, the MAC AIDS Fund. MAC was on of the first to bring charity to the retail sector.

MAC started this with their new line VIVA LA GLAM, which was a lipstick where every cent went towards men, women and children fighting against AIDS. The first lipstick was the color red, which symbolizes the fight against AIDS throughout the world. MAC has always used celebrity endorsements to advertise for VIVA LA GLAM. Currently they have been using Lady GAGA for their advertisement, GAGA is a women who has struggled with her sexuality, hence why she is the perfect person to represent for the MAC AIDS Fund. MAC has provided $128 million dollars towards the MAC AIDS Fund, while paying for their own advertisements, packaging, and shipping out of their own pocket (“The History behind,” 2006).

MAC also gives back to the community by being environmentally friendly through their BACK 2 MAC campaign. The BACK 2 MAC campaign helps the environment by encouraging consumers to recycle their old cosmetic containers. When a consumer returns six of their old MAC containers they will receive a free lipstick of their choice. The BACK 2 MAC campaign is not only helping out the environment but also giving their customers an opportunity to try out a product that they might not necessarily buy with their own money. MAC is sold in 66 countries around the world and in 1,000 outlets (“The MAC Cosmetic,” 2007).

MAC is considered a high quality cosmetic company, selling their products in a higher price range. With their average pricing ranging anywhere from fifteen to twenty dollars for their basic make up, and for a more high end products it can price much more than that. MAC products are often sold in more high-end malls generally having their own stores. If you were to see MAC in a department store it would be a more luxurious department store such as Nordstrom and Dillard’s. 2.2 Target Market Analysis

Since MAC was founded as a product made for an artistic community based off of stage lighting, it is geared towards more of a niche market segment. MAC is a cosmetic company meant for all ages, sexes, and races. But when said that it is meant towards all ages, sexes, and races it is not always meant for your average everyday makeup. It is targeted to the more artistic person, who is daring to be different and innovative. As stated earlier in the paper, MAC is a more “cult” like culture. Their products are more vibrant and out there, which is meant for a very small segment in the cosmetics market.

MAC doesn’t attract the consumer who is looking for cosmetics that they could wear to work or school, they attract the consumer who is artistic and independent in their life style. While MAC does have it’s charitable organizations through MAC AIDS Fund and BACK 2 MAC to draw in consumers who are willing to give back to their community while also doing something for themselves. MAC doesn’t advertise these organizations well enough to bring in new consumers who are looking for a cosmetic company who gives back, it is more known to their already existing consumers and that is what MAC wants to achieve through this promotional campaign, to broaden MAC’s customers. They have a strong customer loyalty through their existing consumers, but MAC needs to draw in new consumers. The way to do this is to change their promotional strategies and use more than just word-of-mouth. 3. Situational Analysis

3.1 Internal Factors

MAC’s current promotion campaign consists of word-of-mouth, magazine ads, online videos, celebrity endorsement and partnerships with other brands. ”M.A.C spends merely $7,795.8M on advertisement each year, which is nothing compared to what other cosmetic companies spend for advertisement, estimated at 2.7 billion yearly (Lootawan, 2010).” MAC relies on word-of-mouth and letting loyal consumers spread their love of MAC Cosmetics. “M.A.C word-of-mouth promotional strategy helps M.A.C cosmetics promote itself by “letting the brand speak for itself.

This particular strategy has been used by M.A.C since it was first introduced to famous celebrities, which allowed M.A.C to be exposed to the public and become one of the most famous cosmetic lines today (Lootawan, 2010).” MAC uses celebrity endorsements in almost all of their magazine advertisements. “M.A.C is well-known because of the celebrity exposure it gets from high rank clientele.” Some of MAC’s current celebrity endorsements include Lady Gaga, Boy George, Fergie, Cyndi Lauper and many more (Celebrity Endorsement Ads, 2011). MAC is very successful at promoting its cosmetics through social media like Facebook, Twitter and Youtube.

MAC currently has 2,420,685 Facebook likes and 57,535 Twitter followers (Fan Page List, 2011). MAC Cosmetics Youtube channel consists of promotional videos featuring celebrities as well as how to videos from MAC makeup artists (MAC Cosmetic’s Channel, 2011). MAC has also had successful promotions through creating product partnerships with other brands such as Hello Kitty, Barbie, Wonder Woman, Lilly Pulitzer and Alice + Olivia (Temptalia, 2010).

SWOT Analysis

STRENGTHS:

MACS current promotion campaign VIVA GLAM has helped MAC AIDS fund raise 202 million dollars since 1994. MAC promotes its products to all ages, sexes and races by using endorsements from different celebrities like Lady Gaga, Boy George, Lil Kim, Pamela Anderson, Johnny Weir, Missy Elliot, Fergie and many more. MAC has made itself really well known by using bright flashy advertisements. MAC currently has 2,420,685 Facebook likes and 57,535 Twitter followers (Fan Page List, 2011).

WEAKNESSES:

MAC only advertises their products online and with magazine ads, not utilizing other forms of promotion. MAC primarily uses extreme makeup in their advertisements, which doesn’t attract a broad audience of people. MAC doesn’t promote their BACK 2 MAC recycling program very well and many consumers don’t know what it is. MAC primarily focuses their promotions on their VIVA GLAM line of products and not all of the other lines they carry.

OPPORTUNITIES:

By using other forms of advertising, such as direct mail, kiosks and a phone application MAC will reach more consumers. By informing consumers about the BACK 2 MAC program MAC will recycle more used containers and get more consumers shopping in their stores. By showing advertisements with day time makeup looks MAC will attract more conservative women who want to wear their makeup to work and out at night. By using other celebrities like Jennifer Aniston who aren’t as flashy as MACS current endorsers MAC will attract the consumer who wants to wear her makeup a little more modestly.

THREATS:

By using multiple advertising outlets MAC could possibly over saturate their consumers with too many advertisements. By showing how MAC makeup can be used for daytime looks consumers may too closely compare MAC to other makeup brands such as Covergirl and Clinique. By providing direct mail coupons customers may only buy MAC products with coupons or during sales promotions and not at full price, which could cost MAC some revenue. While giving free samples and complementary makeovers will draw consumers into MAC they may just take what is free and not make any purchases, loosing revenue for MAC.SWOT Analysis 3.2 External Factors

Market

General Dynamics

MAC is known for taking a bold approach to cosmetics and not being timid by what the standard is to achieve beauty. They were founded as a cosmetic line for artists and that still stays true today. The company’s dynamic reflects a daring side to cosmetics and allows make-up artists to be free of creativity and ideas. MAC has been very successful in producing a quality brand but with such an extreme dynamic look it can shy off the everyday consumer. The industry of cosmetics is various in all different types of products while marketing to all different types of consumers. Instead of taking the “matchy-matchy” approach that most cosmetic company’s do with matching the right eye shadow with the appropriate eye color, MAC used a more untraditional route (Harris, 2011).

Consumer Behavior

This industry is all about enhancing and beauty with products that make the skin more even, the eyes more radiant and the lips more luscious. Although MAC offers products that do what all the traditional make up lines do, MAC takes the meaning of beauty and mixes it with art. They advertise these traditional products in a unique way by favoring the art side by adding words like “studio” and “glamour” into their product names (Harris, 2011).

Although MAC has a solid product it is seen that a softer approach would be in their benefit. A softer approach will draw in the everyday consumer instead of having the feeling of intimidation. The consumer demands that their cosmetics boost their self-esteem and enhance their feature to help them feel more beautiful. In the narrow product category of art make up there are changes that could be an advantage to companies with this category.

When advertising art make up it creates a very small target market and can eliminate possible sales. MAC should try and shy away from a narrow market and market to a more general audience. Instead of using gallant ad campaigns with bold celebrities, maybe consider putting an average consumer in an ad to show the versatility of the products (Irosado, 2009). As it could appear MAC could use different promotion strategies to achieve this goal of relating more to the traditional consumer. The promotions that they have now are good ideas but not implemented well enough to increase revenue.

Competitors

The competitive situation of MAC is that they are limiting themselves and not using all the resources, opportunities, and marketing strategies to the best of the company’s ability. The competitors are higher priced cosmetics that are also known for a great quality and have the approachableness that MAC does not. Because this industry will always be in high demand and new products are coming out daily to fix the new thing that has become ugly, this segment is very competitive. MAC’s competitors are doing well but may be looking for a change as well.

Communication Process

Promotional Objectives

The overall goal of the promotion objectives is to increase revenue by expanding the current target market while reaching out to a new consumer with new marketing tactics. The promotional campaign intends to add marketing by adding social media, interactive advertising, and connecting with the everyday consumer more efficiently.

The goal is by the end of 2012 MAC has executed all the marketing efforts that are being created with this plan and to see results and feedback by the end of 2012. The plan is to execute brand awareness by the consumer of all the current promotion strategies like Back 2 MAC, AIDS charity, and the makeovers offered with a product purchase of fifty dollars. To implement this plan MAC must first launch the new print ads and to send out the direct mail created to highlight these promotions. The rest of the promotion mixes will begin and to start measuring results.

Results could vary by seeing if there are more conservative women walking in asking about the products to an increase in consumer wanting to use the back to MAC to their advantage. We plan to benchmark our performance by comparing sales to previous years and seeing how he consumers respond to all the new marketing efforts. It is possible to achieve this in various ways with the promotion plan. Measurements will be taken with how many consumers come in talking about or using the direct mail to their advantage. By benchmarking the progress MAC is able to measure the results in an accurate way and see tangible improvement. 4.2 Positioning Strategy

Positioning

The MAC Cosmetics brand was founded with the intentions to market towards makeup artists in the fashion, theatre, and movie industries (“The MAC Cosmetics Story,” 2007). In more recent years MAC has expanded to more of a mass market but still focuses on the original extravagance and innovative looks that it began with. MAC has generally focused on a price-quality positioning strategy. Through this strategy, MAC keeps product prices in a higher range to highlight the superior quality that the products offered are believed to possess (Roy, 2010).

Although this positioning strategy seems to work well with MAC’s minimal marketing and advertising strategy that depends widely on word-of-mouth communication, there are some changes that would greatly increase the success that MAC is already experiencing. If MAC were to change their positioning strategy to focus not only on its products’ superior quality through higher prices, but also on the many features and benefits offered, the company would be much more well-known and successful (Roy, 2010).

With the use of positioning strategies that showcase product features and benefits, there will be much less dependence on word-of-mouth since consumers will already be aware of the many wonderful programs and special features that MAC has to offer. Through MAC’s many unique aspects and new promotion mix ideas, the company will be much more apparent and appealing in the consumer’s mind.

Instead of just hearing about how great MAC’s makeup products are, the consumer will actually be able to see, through increased promotion efforts and unique advertising, how MAC truly is superior in product quality, despite its higher prices. The repositioning of MAC will also focus on making the brand appeal to a broader market by showing how the products offered can be worn as day-to-day makeup and do not always have to be seen as extravagant.

There are several possible risks involved with changing MAC’s positioning strategy and pushing it to appeal to a more conservative consumer. As the brand seems to go more mainstream and become more visible to the public eye, it could lose some support from its original market. The new positioning strategy must take precautions as to not lose the original market by keeping MAC’s initial image in tact by simply featuring what MAC already has to offer in new and innovative ways.

This shift of positioning strategy to highlight MAC’s best product features and benefits is the best move for MAC to become more prominent in the cosmetic market and is necessary for the growing success of the brand. The MAC brand has typically been positioned as a more expensive and extremely avant-garde cosmetic company in relation to its competitors. Some of the main competitors that MAC faces include Sephora, Urban Decay, Lancôme, and many others that are featured in the positioning map below (“JGlamour Makeup Brushes,” 2009). Currently MAC. seems to fall in the higher end as far as pricing goes and extremely avant-garde in style (Belacel, 2010). The consumer has generally seen MAC products as too extravagant and too innovative when it comes to style, colors, and the overall look the makeup usually is shown to create.

With new positioning strategies in place, the MAC brand will seek to appeal to more conservative consumers by showing the market the wide range of looks MAC makeup products are capable of without losing the original market’s interest. The shift in positioning strategies will leave MAC in the same place as far as quality and price go in relation to competitors, but will attempt to cover a wider range of styles to appeal to a wider range of consumers while still maintaining the edgy extravagance that captured the loyalty of the original market.

Target Market

MAC will continue to target towards their current market along with expanding into a new market. The target consumer for the new MAC promotion campaign is the female of all races within Generation X. The target consumer ages between 30 and 50, born between 1961 and 1981 and estimated at 50 million (Dawson, 2011). These individuals grew up in tough economic times mainly in two-income families. However, during the Gen Xers childhood, parents started to divorce and the women of the household began to join the workforce. Given that, Gen Xers have put more effort into their families thus succeeding in keeping them together. Seventy-one percent of Gen Xers have children, and have developed a middle ground into how they have chosen to raise them (Dawson, 2011).

As parents, this generation is highly involved in their children’s lives and over 80% expect their children to earn at least a baccalaureate degree (Dawson, 2011). The shift in economy has converted from manufacturing to servicing, which gave Gen Xers the ability to adapt to changes and integrate new technologies. Technology has been incorporated into their lives since their youth. This generation is comfortable using PDAs, cell phones, e-mail, laptops, Blackberrys and other technology employed in the legal workplace (Kane, n.d.). The Gen Xers have adapted into independent, resourceful and self-sufficient individuals. Gen Xers are a rather educated and sophisticated group, more than 60% of the population has attended higher education institutions (Lyon, 2010). Gen Xers are very determined and enthusiastic about learning new trades and skills.

The mentality of this generation is much different than other generations, they work to live rather than live to work. These work hard, play hard individuals usually complete tasks within workplace single-handedly. While 60% of the current workforce is occupied by this generation (Collier, 2009), they are seen as devoting long hours to their careers and continuing their education. Within Gen X’s population, 86% is employed, 70% devote 40 or more hours to work each week and those with a doctorate or professional degree devote 50 or more hours; 79% of the Gen X women work (Dawson, 2011).

Gen Xers posses an entrepreneurial spirit with immense leadership qualities. Already in CEO or management positions within financial services, communications and retail, these individuals are seen to be in the best position within the job market and will inherit Baby Boomers positions once they retire. In 2005, the wealthy members of Gen X have an average income of $213,000 and spend 18% or more than Baby Boomers (20%) on luxury goods (American Express, 2005).

Studies have shown that 70% of women won’t leave the house without applying something to her face, with 68% saying cosmetics make them feel more confident (Douglas, 2010). Generation X spends an average of $3,235 a year on fragrance, cosmetics and beauty products, 60% more than Baby Boomers (American Express, 2005). Pam Danziger, founder of Unity Marketing explains, “Marketers tend to think of the Gen Xers as a cohort too small to even worry about, but this research shows that Gen X may be small in size but they are mighty in luxury buying power,” therefore “ they are in a more youthful life stage and are accumulating a lot of big material goods… influence is destined to grow even more in the luxury market in the future…” (American Express, 2005).

Moreover, the affluent Gen Xers earn an average of $152,500 per year (American Express, 2005). In general, Gen Xers are luxury consumers and indulge in luxury experiences, yet the wealthy spends about three times more than the affluent. Differences amongst the purchase behavior of the two social classes are that the affluent like to find deals on luxury goods with the sense of being a smart shopper. Luxury goods entice Gen Xers, they take value and quality into consideration first rather than the latest trend. They’re extremely skeptical when it comes to advertisements, flashiness does not attract them into making a purchase. As the Internet emerged into the Gen Xers society they became the first mass-media generation.

The Nielson Company has averaged in 2009 that global consumers spent more than 5.5 hours on social networking sites with Generation X being one of the main users (Porterfield, 2010). Adults ages 30 and over are involved in social networking at 40% much less when compared to 72% of young adults. Gen X moms favor Facebook while 44% use social media for word-of-mouth recommendations on brands and products along with 73% feel they find trustworthy information about products and services through niche online communities (Porterfield, 2010).

Two-thirds of Facebook moms are a fan of one company or brand therefore Facebook is a fertile ground for marketers to engage mothers and drive sales (Porterfield, 2010). Traditional media referencing TV, Internet, Newspapers, Magazines and cell phones reach 46% to 86% of Generation X (Continuum Crew, 2010 ). Moms within Gen X use the Internet for purchases, online research, sales sites and Groupon, which are amongst the most popular methods used to find great deals. Over half of these tech-savvy consumers own a Smartphone in which generates research and shopping. Application downloads on Smartphones have increased, users spend roughly 80 minutes per day using apps and download at minimum nine new apps per month (AdMob, 2010).

Brand Communication

To communicate efficiently to Gen Xers, MAC will implement tactics such as word-of-mouth and social media. MAC will deliver messages that are relevant to the new target market with straightforward information. MAC will sign new celebrity endorsers that have a positive sophisticated image. It is found that on average, ads that contain a celebrity endorser produced 9.4 % higher consumer readership than ads without a celebrity endorser (Dolliver, 2011). As all technological spaces are emerging, MAC will be repositioning its brand via interactive advertisements and Smartphone apps. MAC will cater to Gen Xers values of genuine promotional strategies. 5. Promotion Mix

MAC’s new promotional campaign will use three forms of advertising mediums including print, direct and interactive. MAC’s new promotions will include expanding MAC’s current use of print media by introducing new magazine advertisements. MAC will also begin to use direct media by sending out many different direct mail-outs to customers.

Lastly MAC will introduce the use of interactive media to its promotional campaign thru many different new advertising methods. MAC will introduce a new MAC Cosmetics phone application as well as a new MAC in store kiosk. MAC will also host interactive mall events to further promote their make-up to all consumers. MAC’s new promotion campaign will include interactive media with a new phone application that will make the MAC make-up world more accessible to all consumers who own Smartphone’s.

With this application consumers will be able to purchase MAC products from the palm of their hand. The MAC Cosmetics application will be full of information for consumers to learn more about MAC Cosmetics as well as make purchases. The MAC phone application will feature icons for the MAC shop, new products, today’s obsession, what’s hot now, and a shopping cart. The icon for today’s obsession will have daily tips from MAC makeup artists on what product they are obsessing over that day and videos about new ways to wear MAC makeup. The what’s hot now icon on MAC’s phone application will feature all of MAC’s best selling products with a comment box for consumers to write what they think of MAC products.

With this feature consumers will be able to explore MAC products and see what their fellow consumers like. The what’s new icon on the MAC phone application will present all of MAC’s new products as well as any new MAC collaborations with other brands, like Barbie and Hello Kitty. The MAC shop icon will be where consumers can search through all of the MAC products by type of cosmetic and color. Once a consumer has chosen what makeup products they want to purchase they will then go to the shopping cart icon where consumers can purchase their products to be shipped to their home with a credit or debit card.

The MAC application will be updated daily with today’s obsession and anytime something new is being introduced. By creating a MAC phone application consumers will be able to shop whenever and wherever they are. MAC’s new promotion campaign will also include interactive media thru a new MAC kiosk located in MAC stand-alone stores as well as in MAC locations in department stores. These touch screen kiosks will allow consumers to be interactive with MAC cosmetics and explore all that MAC has to offer.

With the MAC interactive kiosk consumers will be able to walk into a MAC store and go up to the kiosk and browse through the MAC merchandise. When a consumer finds a product they like they will be able to click on it and be taken to a page that will contain a full explanation about that MAC product, photos of different ways that specific product can be used, and other complementary products that go along with the selected product. If a consumer decides that they want to purchase that product they can click on the buy now button and the kiosk will inform the consumers if that product is available in the store.

If that product is not available in the store the consumer can purchase the product right from the kiosk with complementary shipping from MAC. If a consumer wants to receive more information about a product or test the product all they will do is click the button located right next to the buy now button, labeled try me. By clicking this a MAC consultant will be notified and be able to assist the consumer with information about the specific MAC product or try the product on the consumer. If it is a product that is unavailable in that specific MAC store the consultant will be able to show the consumer different products that are similar to the one the consumer has selected. The MAC kiosk will be a great tool to use especially when the store is very busy.

A consumer will not feel like they are just standing around waiting for a MAC employee, but they will be able to do research on these kiosks and find exactly what they are wanting. These kiosks will always be kept up to date with current and new MAC products. By having MAC kiosks more consumers will be able to be informed about all MAC has to offer. In this new promotional campaign MAC Cosmetics will also expand on their use of interactive media by hosting many different mall events throughout the United States. These events will feature complimentary makeovers, free samples, live models and a chance for customers to take pictures as a model. These events will be a great way for customers to be able to learn more about MAC cosmetics in a fun and interactive way. MAC will send out emails to all existing customers in the area informing them about the mall event. MAC will also have signs on mall entrance doors as well as fun music playing to draw in curious people walking by.

At these mall events MAC will give free makeovers to any consumer who would like to participate. After they receive their makeovers customers will be able to participate in a MAC photo shoot, where the customers will take a picture and receive an online code where they can upload their picture for free. Make consultants will also be passing out small free samples to consumers so they can get a feel of how great MAC make-up is. MAC will also have hired models walking around and posing with various makeovers to show consumers everything they can do with MAC make-up.

By hosting these mall events MAC will introduce their make-up to new consumers and MAC will get more customers in the store and increase revenue. These mall events will be hosted throughout the year at major malls such as North Park Center in Dallas, Texas, Mall of America in Bloomington, Minnesota, Glendale Galleria in Glendale, California and many more. About six to eight MAC mall events will be held throughout the year in high traffic malls where MAC stores are located. By having MAC mall events MAC will be able to introduce their products to a new consumer in a fun and interactive way. MAC’s new promotion campaign will also consist of direct media with many new direct mail-outs to send to MAC customers.

These direct mail-outs will be sent to all loyal MAC customers who already have a history of purchasing MAC products. This concept will directly let MAC choose who receives which offers, and pinpoint the customers within different groups desired to target. Similar to the direct mail-outs Victoria’s Secret sends out to their loyal angel card holders, the MAC direct mail-outs will give consumers the opportunity to learn about all MAC promotions and sales, as well as any new products.

The MAC direct mail-outs will showcase the latest trends and colors for the season and potentially drive the customer to shop online or in the store. MAC will send out direct mail-outs presenting the newest MAC products. For example the new color tones for winter 2011 or Summer 2012. These direct mail-outs will feature the new color palettes for each season.

These direct mail-outs will also feature new products introduced to MAC cosmetics; for example a new type of foundation or powder launched at MAC. Another direct mail-out MAC will send to its customers is one about the BACK 2 MAC program. Every six months MAC will mail out information about the BACK 2 MAC program to remind customers to save up their old containers to be recycled and bring them back to the MAC store to receive a free MAC lipstick. A third direct mail-out to be sent out to MAC customers is one to advertise MAC sales or promotions. Special offers such as free shipping on orders over a hundred dollars, free cosmetic bag with purchase of a new product, and coupons such as ten dollars off of fifty dollars or twenty dollars off of one hundred dollars. All of these direct mail-outs will drive the consumers in to the MAC store to make purchases or to shop online.

The last form of direct mail-outs to be sent to MAC customers is one informing consumers about MAC’s support for AIDS, the MAC AIDS Fund. This advertisement will inform consumers about how MAC donates the entire selling price from its VIVA GLAM lipstick and lipglass to the MAC AIDS Fund. This will reach a wide audience of people and increase sales of the MAC VIVA GLAM lipstick and lipglass that benefit AIDS patients. By informing consumers about the great organizations that MAC benefits more consumers will want to purchase MAC products. MAC will send out one direct mail-out each month to loyal customers.

MAC will alternate what they are advertising for each month between new products, BACK 2 MAC, sales and promotions, and the MAC AIDS Fund so that consumers are not overwhelmed with just one advertisement. MAC currently uses print advertisements in their promotion campaign, so for this new promotion campaign MAC will expand and add new print advertisements. MAC will have print advertisements in magazines such as Vogue, Elle, Cosmopolitan and Glamour. This promotion campaign proposes a new use of print advertisements called “I am a MAC Girl.” The “I am a MAC Girl” campaign is a way to promote MAC cosmetics to the fun flirty girl who wants to wear her make-up a little more natural and light. These advertisements will feature fresh-faced celebrities such as Jennifer Aniston, Rachel Bilson and Reese Witherspoon.

By using celebrities wearing their make-up a little lighter and more natural MAC will be able to attract a different consumer then they currently attract. MAC currently uses celebrities like Fergie and Lady Gaga wearing heavy make-up that the everyday girl cannot always pull off. This campaign will keep the MAC’s current advertisements while adding the “I am a MAC Girl” advertisements to attract all different consumers. MAC will switch off each month running their VIVA GLAM advertisements they currently have with the “I am a MAC Girl” advertisements so that the same magazine does not always have the same advertisements.

For example in April Vogue magazine will have a VIVA GLAM advertisement featuring Lady Gaga and then in May Vogue magazine will have an “I am a MAC Girl” advertisement featuring Jennifer Aniston. By using these new print advertisements MAC will be able to target the more conservative women who wants to wear MAC make-up to work while also keeping the advertisements to the extravagant woman. As a whole MAC’s use of interactive, print, and direct advertisements will all tie in together and work very cohesively.

Consumers will be able to see MAC advertisements in multiples places including in stores, in magazines, on line, and in their mail. This way MAC consumers will not be overwhelmed with only seeing one form of advertising over and over again. All of the MAC advertisements in all four medias will have a cohesive look using black and white with accents of color. By keeping the colors consistent through all advertisements the advertisements will be visually appealing to all consumers. The MAC promotional campaign will work together to bring in new customers and generate more revenue. 6. Evaluation

MAC has made a brand image for itself mainly using word-of-mouth, so by bringing in new types of advertising and a new target market the only place it can go is up. This new promotion campaign isn’t changing the product in anyway it is just bringing in a different promotional strategy to reach out to a different target market, which is why it wont hurt the company. We are doing so through informational advertising, with promoting BACK 2 MAC and the MAC AIDS Fund more, which also advertises the company with an emotional appeal to those who support these charities.

Another way we are using emotional appeal is by bringing in celebrities to the promotion so that MAC consumers can relate to these celebrities or strive to be like them through using MAC products. Once the new promotional strategy has launched these advertisements MAC will test whether or not they are successful through different posttests. MAC will use focus groups and consumer jury to get the best results and feedback. MAC can actually talk to customers or potential customers in the target market and get the true reaction of what they got out of the new promotional strategies. By receiving feedback from MAC’s new target market MAC will be able to adjust any advertisements if needed to get the best results possible.

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MAC Cosmetics

“All ages, all races, all sexes, all MAC. ” This is the motto for one of the fastest growing cosmetics brands in the world, MAC Cosmetics. For MAC artists and MAC customers this motto is not just words it is truly what drives the culture of this amazing Company. At any given time you will find grandmothers shopping for color with their granddaughters. Isn’t that an amazing and wonderful concept? As you read further you will see why MAC is such a unique entity in this well established industry.

Every aspect of what makes MAC Cosmetics; “MAC” being its products, its location, its brand image, or its phenomenal price point is unique and goes against most typical marketing methods. As we all know product, price, promotion and place are the four fundamental variables that either make or break a company. MAC is currently the only Estee Lauder brand that is not only meeting; but exceeding its annual sales goals.

Last year MAC surpassed its sales plan by 121 million dollars! Which is unheard of in this industry. Lets start at the beginning Makeup Art Cosmetics or MAC was created in 1984 by two men, Frank Tosken a seasoned makeup artist and photographer and Frank Angelo a successful business owner of a chain of salons in Toronto. They found that cosmetic products that were readily available were not performing well under the intense environment of studio lights & perspiration, had little color payoff, and were constantly having to be touched up.

So, they created cosmetic formulas and colors that met these specific needs. By using them backstage on models and performers news traveled fast about how wonderful these products were. At first MAC was only available to the professional makeup artist. Then by word of mouth news spread to the general population and was maid available to the public and in 1994 was purchased by the Estee Lauder who owns many of the world’s favorite cosmetic brands. MAC continues to be a testimonial brand of cosmetics, meaning that there is no paid advertising for MAC to promote their traditional product.

They rely solely on testimonials and word of mouth advertisement. However you may find that MAC does advertise only one product and that is Viva Glam Lipstick. This is their charity lipstick and it comes in five different shades. 100% of the retail selling price of this lipstick goes to men, women and children living with or affected by HIV and AIDS. This money goes to living needs and not research. MAC feels that there are enough efforts going towards finding a cure for AIDS, and that providing money to help make someone’s life a little easier makes more of an impact right now.

Currently the spokes person for Viva Glam V lipstick is Pamela Anderson, and she has helped us raise 4 million dollars for our MAC Aids Fund. As a whole, Viva Glam Lipstick has raised over 50 million dollars since its inception in 1984 and this number continues to climb. MAC’s image is Sleek, Clean, and straight forward. This is expressed through their packaging, product names, store image and how their employees dress. MAC is all about allowing the product to be the focus, so product packaging is simple and made of plastic or glass. There are no fancy shapes or embellishments.

This allows for a reasonable price point and for the product not to be overshadowed by opulent, gaudy packaging. MAC products also have straight forward, logical names. For example eye shadow is called eye shadow, and their matte foundation is called Studio Matte Finish Foundation, instead of something creative like “eye transformer” or “Perfect Finish Foundation” which many other cosmetic companies use to sensationalize a product. Often you will find that MAC products have the word “Studio” or “Pro”, before the actual name of the product. Such as Studio Fix Powder Foundation or Pro Eye makeup Remover.

This is done so that customers know that this product was actually used by makeup professionals and used in a studio setting. This means, that these products do what they are meant to do quickly, and are easy to use and create a great finish that lasts. MAC wants its customers to be able to experience their product line in a clean straightforward way. So, MAC locations are minimalistic, with Marble counter tops, wood or poured cement floors, and open tester units.

When a customer walks into a MAC location they tend to be a bit overwhelmed, because all of the products are open and available to experience. That is why the MAC makeup artist is so important. All MAC employees are professional makeup artists. This means that before they are hired they must have experience doing makeup in a retail environment, or doing makeup as a profession. That is why customers have such high expectations when they come to a MAC counter.

They know that the experience they’ll have is going to be at a higher level since they are dealing with professionals. The MAC image is also communicated to the customer by the way artist dresses for work. A 100% Black attire is required. There is no particular dress code other than that. An artist is free to express their personal clothing style, as long as it is black. This allows an Artist to express and display their creativity and individuality, and in turn allows the customer to get a feel for the style of a makeup artist.

Each customer is drawn to the MAC artist that represents a look that they can identify with, which is the start of a great customer experience. MAC artists are also required to wear a minimum of fifteen MAC and only MAC products on their faces every day. This is great advertisement, and shows the versatility of the products. MAC is considered to be a luxury cosmetic line. Channel, Lancome, and Christian Dior are also luxury brands. Their prices tend to be quite high, for example the average price of a foundation from any of these lines is around $40.00. The most expensive MAC foundation is $27.50.

They keep their prices down so that everyone can afford the experience of wearing professional products. The straight forward packaging and the lack of mass advertising and free gift promotions allows them to keep their prices reasonable. So you may ask, why doesn’t MAC have a free gift? Every three to four weeks MAC launches a new color collection. Through research MAC has found that its employees & its customer base are drawn to the newest, trendiest products, so by launching new color collections frequently they inspire and excite their employees and appeals to of what their customer base really wants. By doing this MAC has a steady flow of income throughout the year. Most of the other companies have severely high revenue during “free gift” promotions and low revenue points when they don’t.

They have trained their customer to buy when they’re getting something for free, which can be a tough cycle to break. They constantly have to come up with bigger and better “gifts” to keep their customers coming back. To reward their customer for being loyal to the brand, and to also help the environment, MAC has a consciousness program called “Back to MAC”. Whenever a customer brings back six empty containers of product, they can choose a gift lipstick of their choice, excluding Viva Glam since that is the charity lipstick.

This incentive program allows customers to try a MAC lipstick if they never have, as well as try a new color that they may not usually pick without the commitment. To touch the professional customer MAC offers a 40% discount to professional makeup artists, and a 30% discount to industry professionals such as models, actors, new anchors, nail techs, and hair stylists. Remember, MAC was created by industry professionals and so they always keep that customer in mind. Although so many customers are willing to purchase MAC product without a free gift, the company realizes that a promotional and limited life items will excite their customer in a similar way.

So, seasonally MAC creates limited life products in their color collections, and these products are only available until they sell out. Making such exclusive products creates a sense of urgency in the customer so that they buy now instead of later. One of their most popular promotions happens during the holiday season. MAC launches a series of holiday brush, eye shadow, lipstick, and lip gloss sets at an incredibly low price. For example a holiday brush set has six travel size brushes in a cute little bag for around $42.00.

If you were to purchase these same six brushes at regular price it would cost you around $245.00 and you don’t get a bag. These holiday sets are shipped in limited quantities, and are one of the most anticipated launches of the year. Receiving these collections on time is very important to each location, and since the MAC customer thrives on trends timing is everything. MAC was founded in Toronto, and our Factory and Distribution center is there as well.

Through meticulous planning each MAC location receives new color launches about 2 – 3 weeks before the product goes on counter. MAC doesn’t believe in having a lot of back stock sitting in stock rooms. So it is the responsibility of the Retail Manager to send a stock concerns list to the buyer of the store and the company ships them more product based on their most popular items and what is put on the list.