Firms, Institutions and Competition

EBB 6103

No. Name Matrix No.

1 Piriyatharsini a/p Gobal 17030058
2 Sharmila Devi a/p R.Rameis 16030181
3 Sarah Shamini Murugaya 17030057

TABLE OF CONTENTS

CONTENTS PAGE NO.

OVERVIEW OF COSMETICS INDUSTRY 1-2

1.0 MAC BACKGROUND 3

1.1 Mission & Vision of MAC 3
1.2 MAC BRAND PROMISES 4

2.0 COMPANY ANALYSIS 4-6

3.0 PRODUCTS OF MAC 6-7

4.0 Market Structure 7

4.1 Market Analysis 7
4.2 External Influences on the Market 8
4.2.1 Economic Trends 8
4.2.2 Demographic Trends 8
4.2.3 Social Trends 8-9
4.2.4 Technology 9
4.2.5 Consumer Data 9-10
4.3 Brand Analysis 10
4.4 SWOT Analysis 10
4.4.1Brand Strengths 10
4.4.2Brand Weaknesses 11
4.4.3 Marketing Opportunities 11
4.4.4 Threats 11
4.5 Marketing Communications Plan 11
4.5.1 Target market 11
4.5.2 Demographic 11-12
4.5.3 Psychographic 12
4.5.4 Geographic 12
4.6 Marketing Communications Strategy 12
4.7 Marketing Mix 12-13
4.8 Advertising Plan—Creative 13
4.8.1 Creative Strategy 13-14
4.9 Advertising Plan—Media 14
4.9.1 Budget 14-15

5.0 Media Strategy 15

5.1 Target Market Strategy 15
5.1.1 Market Coverage 15
5.1.2 Timing 15
5.1.3 Reach/Frequency/Continuity 15
5.2 Media Selection Rationale 15
5.2.1 Television 15-16
5.2.2Print 16
5.2.3 Out-of-Home 16
5.2.4 Online 16-18
5.3 Public Relations 18
5.4 Experiential Marketing 18-19
5.5 Marketing Mix (4P’S) 19
5.5.1 PRODUCT 19
5.5.2 PRICE 19-20
5.5.3 PROMOTION 20
5.5.4 PLACE 20
5.6 Porter 5 Forces 21
5.6.1 Threat of new entry 21
5.6.2 Bargaining power of customers 21
5.6.3 Bargaining power of suppliers 21
5.6.4 Threat of substitutes 22
5.7 PEST Analysis 22
5.8 Company Performance 23-24

6.0 Recommendation 25

7.0 Conclusion 26

Reference & Appendix 27 - 36

 “M.A.C COSMETIC”

OVERVIEW ON COSMETICS AND TOILETRIES IN MALAYSIA

According to a report, Malaysians spent about US$600 million on cosmetics and

toiletries products, appliances and equipment in 2008. This demand was mainly met
by imports. Skin-care products remain the main driver of growth for the cosmetics
market. Apart from skin-care products, the second largest contributor to the cosmetics
and toiletries industry is color cosmetics. Lip-coloring products command the largest
share in the color cosmetic pie compared to face, eye and nails. Malaysia imported
US$225 million of skin and beauty products in 2008. This is a 35% increase from the
previous year. With the current global recessionary economic climate, growth for
2009 is expected to be more cautionary in nature. A shift from high-end cosmetics
and toiletries to the mid to mass market brands are anticipated. Even so, the demand

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growth for cosmetics and toiletries products and services, as well as devices and
equipment is expected to be positive in the next few years.

With the current global recessionary economic climate, growth for 2018 is expected
to be more cautionary in nature. Skin-care products remain the main driver of growth
for the Malaysian cosmetics market. Industry players are expecting a shift in prestige
and high-end brands to the moderately priced niche and mass market brands. This is
especially so for consumers affected by the economic downturn. However, the
well-heeled and the brand loyal consumers will either maintain or slightly reduce their
current level of consumption. There is a natural tendency for mass market and drug
store/ pharmacies cosmetics and toiletries to thrive in times of economic uncertainties.
In this market segment, targeted skin-types skin-care products are gaining popularity.
Majority of the mass market cosmetics and toiletries are mostly manufactured locally
or in the ASEAN region. Market leaders for cosmetics in the fast moving consumer
goods segment are the multinational corporations (MNCs). Unilever, L’Oreal, and
Proctor, Gamble,MAC,Bobby Brown have strong presences in Malaysia.

“There are no ugly women, only lazy ones.”

Helena Rubinstein.

Physical attractiveness was a high concern to all people even in early ages and until
now people still put an effort to create own unique image that define themselves
through the outer look. According to the article, “Facial attractiveness: Evolutionary
based research” written by DeBruine, Jones and Little physical attractiveness has an
important role in the social consequences with given examples such as it can
influence an upward economic mobility, creates more dating opportunities than to less
attractive individuals, attractive people seems to lead more favorable lives etc. (2011).
It shows that physical appearance is everyone’s way of promoting themselves.

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1.0 MAC BACKGROUND

Makeup Art Cosmetics brand idea started in Toronto due to the frustration of a
photographer Frank Toskan and a salon owner Frank Angelo (Our, 2016). According
to “Our Story” published on brand’s official website, their frustration was about the
quality of makeup because they could not capture applied makeup so well into their
photographs, therefore, they decided to create their own makeup products. At first, a
distribution place was their salon and it went straight to makeup artists, models and
photographers, however, stylists and fashion editors soon became their customers .
One of the first ways how their makeup products spread was through praises from
magazine credits and the growth of the 10 word-of-mouth popularity, therefore,
Toskan and Angelo launched their products under the brand name MAC Cosmetics in
March 1984 in a Toronto department store . Even though majority of beauty
companies were predominantly focused on skincare products at that time, MAC

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Cosmetics differentiated itself by focusing on color makeup . MAC Cosmetics
quickly gained on popularity in the industry and it explained this success by
describing its product as a combination of “street savvy with glamorous style and
wide range” . However, it became as a part of Estée Lauder Companies in the year
1994 and until now it can be found in over 105 countries around the world . Estée
Lauder Companies wrote in its “2016 Annual Report” that nowadays its portfolio
consists of over 25 brands reaching nearly every corner of the world. Estée Lauder
Companies is the only large company that is only focused on the so-called prestige
beauty which is described as a segment that is prospering and growing in the beauty
industry . Estée Lauder Companies wrote in its “2016 Annual Report” that one of the
factors that pushes this segment to grow and prosper is that there is a great
consumption in emerging markets which could make up 25% of this segment retail
sales in 10 years (2016). Estée Lauder Companies’ adjusted sales in this industry
segment and it grew by 13% in constant currency in fiscal 2016. This company said
that its growth was balanced across regions, which also includes Asia/Pacific.
Asia/Pacific beauty market is mostly focused on skin care products which is led by
Estée Lauder, Clinique, Bobbi Brown and MAC Cosmetics . Despite region’s market
focus on skin care products, top prestige beauty brand in several markets of this
region is MAC Cosmetics.

1.1 Mission & Vision of MAC

“All Races, All Sexes, All Ages” conceived to embrace all consumers. To be the
worlds leading make-up authority among both professional make-up artists and
consumers.To meet customers need for superior quality services and to provide secure
& challenging work environment for all employees. To meet everyday needs for
nutrition; hygiene and personal care with brands that help people feel good, look good,
and get more out of life. As an organization it commits itself to high standards and
creative development with an enterprise concept that all pains have gains.
M.A.CAIDSFUND.ORG was launched in 1994, supporting men, women, and
children affected by AIDS/HIV globally. M.A.C. introduced the "Kid's helping Kids"
which, with the sale of greeting cards, painted by the kids, will be donated to pediatric
organizations.

1.2 MAC BRAND PROMISES

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MAC promises on 4 things :

1.Distinctive
2.Valued
3.Consistently delivered
4.Kept over time

Elaborately MAC brand promises a creative makeup experience giving you the
confidence to stand out and be stylish.

2.0 COMPANY ANALYSIS

MAC Cosmetics describes itself on the official website as “the world’s leading
professional makeup authority, because one of its strength in this industry would be
the community of professional makeup artists which make MAC Cosmetics an
unrivaled expert in makeup industry . Other factors that makes MAC Cosmetics as an
unrivaled expert in this industry is that the company is composed by talented and
dedicated employees who are mostly experienced industry experts. They still continue
to look for new talents who will take part in creating new future products . In Estée
Lauder Companies’ annual report for the year 2016, they wrote that many of their
talented present and promising leaders stepped into important roles which will further
develop skills and talents, and also this will have a broader impact on the company’s
success .

Brand is nowadays at the position of trendsetting because of its collaborations with

leading artistic talents from areas such as fashion, art and popular culture. Beside the
collaboration with leading artistic talents, Estée Lauder Companies also partner with
some entrepreneurs that are behind potentially growing into global, iconic, future
brands in the prestige beauty segment. Estée Lauder Companies’ “2016 Annual
Report” reported that as global internet connectivity increases the company and
retailer e-commerce and m-commerce platform contributed to exceed $1 billion in
online sales which can be converted as an increase of 27% in constant currency .The
graph of the global online sales from the fiscal year 2012 until the fiscal year 2016 is
shown in the Figure 1 and it can be seen that this is for the first time in the company’s
history to exceed 1 billion USD in online sales. Nowadays, distribution channels such
as online and mobile channels are gaining popularity as we can see 12 in Estée Lauder

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Companies online sales increase of 27%, and also they reported that mobile channels
were responsible for an increase of over 35% of their global online sales in fiscal
2016.

Figure 1. Estée Lauder Companies Global Online Net Sales. Reprinted from Estée Lauder Companies,
by Estée Lauder Companies Inc., 2016

In the Figure 2 which was retrieved from the “2016 Annual Report”, Estée Lauder
Companies shows each region’s percentage of net sales (2016). Out of 3 regions the
Americas’ percentage of net sales is the highest with 42% and the lowest is
Asia/Pacific where it contributed just 19% (2016) However, net sales in the
Asia/Pacific region has risen 4% in constant currency and the main markets that
contributed in this rise are from countries like Australia, Japan and Korea (2016).
More than 6% of region’s total sales is represented by online sales.

Figure 2 : Percentage of Net sales of Each Region

As mentioned before, MAC Cosmetics has quickly gained in popularity in the

industry through its extensive selection of wide range products, however, this brand
has not differentiated itself only through its products, but also through its promotional
strategies. MAC Cosmetics‘ stores and department store counters are immediately
different at a first glance because stores’ main color is mostly black and its products
are neatly arranged.

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Design of the stores possesses individuality and self-expression which are two
elements that brand honors. One of the MAC Cosmetics promotional ways that makes
the brand to be world’s leading beauty trendsetter is that it collaborates with
well-liked names that are from popular culture, art and fashion such as Rihanna,
Lorde, Proenza Schouler, The Rocky Horror Picture Show or Brooke Shields. This
strategy allows the brand to reach to existing and new fans. Additionally, brand
makeup Artists’ participation in the backstage at over 200 fashion week shows around
the world that allows them to work with names such as Prabal Gurung to Vivienne
Westwood, also allows the brand to drive trends around the world. In order to reach
even greater number of customers, MAC Cosmetics creates different promotional
activities through digital platforms.

Brand launches social media campaigns such 16 as MAC’s “MIX+MASH” global

Instagram program or it offers inspirational looks and makeup technique tips through
digital tutorials from “style-experts”, how-to videos and different tips from key
influencers. It has a pool of over 20,000 talented global artists who can contribute in
this kind of digital promotions. Just by counting the number of followers across MAC
Cosmetics’ digital platforms, it already has more than 26 million followers. Worth to
mention MAC Cosmetics activity that involves well-liked names as spokespeople is
the creation of MAC AIDS Fund which was created in 1994 when HIV and AIDS
continued to spread across the world. To support HIV/AIDS organizations and the
fight against this disease, MAC Cosmetics launched VIVA GLAM campaign with
spokespeople such as Lady Gaga, Pamela Anderson and Nicki Minaj . Brand has
raised over 400 million USD for the charity through this campaign.

3.0 PRODUCTS OF MAC

New trending products of MAC

GRAND ILLUSION MAX X ROBERT VELVET MATTES HOLIDAY SNOWBALL RETRO MATTE

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GLOSSY LIQUID LEE MORRIS LIQUID LIPCOLOUR

MAKE UP PRODUCTS

PRIMER + SKIN CARE

4.0 Market Structure

M.A.C which is from a Cosmetic Industry is classified under “Monopolistic

Competition”. It is a type of imperfect competition such that many producers sell
products that are differentiated from one another (e.g. by branding or quality).With

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cosmetics, there are many different sellers and buyers for this market. Some other
examples in cosmetic industry are, Chanel, Revlon, Loreal, Estee Lauder and Marry
Brown.

Although the makeup products made by these companies include basic features we
would find in other products within the same category, each one that is created is
slightly different from the competitor with some features more enhanced than others.
Maybe one lipstick has SPF protection, while the other is designed to be water-proof
and so on.

In addition, in this industry, there is also easy entry and exit. There are many
cosmetics entities from sole proprietors who make their own cosmetics, to
independent shops in the mall, to big companies that we may find in drugstores, to
other large companies found only in department stores.

4.1 Market Analysis

The cosmetic and beauty industry is a competitive market with four classifications.
Prestige counts as the department stores and specialty stores in which beauty products
are sold. The Bay, Macy’s, Sephora and MAC fall under the prestige classification.
Mass merchandisers are classified as broad. This could be Costco and Sam’s Club.
Avon and Mary Kay are classified as alternate and involve direct sales. The final
classification is specialty. The Body Shop and Bath and Body Works fall into this
category as well as specific products/product lines sold at spas and salons.
The industry made nearly $35 billion in 2010. The industry experienced a yearly
growth of about 4% from the four years before. The growth of the market is expected
to stay around the same until the year 2015. It is estimated that the value will grow to
$42 billion.

4.2 External Influences on the Market

4.2.1 Economic Trends

The obvious ongoing recession has led to many consumers trading down on some
products and as a result they become accustomed to buying lower-priced products
(Lennard, 2011). While drug store brands might not offer consumers the same
benefits that high-end brands like M.A.C. can, they cost much less. High-end products
can really take a bite out of your budget which can deter consumers from spending
their money on our brand. With a poor economy such as this one, people are finding
ways to save their money. The reality is that drugstore brands do offer some great
products and so there is an industry concern that consumer might continue these
habits as financial pressures ease up in the future (Carrillo, 2007).

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However, the market for cosmetics has fared better than other industries because
consumers view these products as affordable luxuries. People are competing in a
tough employment market and as a result they need to look their best to convey
confidence in an image-conscious society (Carrillo, 2007). Many high-end brands
take advantage of this opportunity as their products are often promoted by
professional men and women.

4.2.2 Demographic Trends

The use of cosmetics has become more commonplace among men in today’s society.
Although women continue to outnumber men, the male population is expected to
grow at a somewhat faster rate (Denise Smith, 26 J). This can be used to our
advantage as it would provide us with an opportunity to increase penetration of
cosmetics and fragrances among the growing male consumer base.
An increasing population will also benefit the cosmetics industry (Denise Smith, 26 J).
While an ageing population could prove to be unfavourable, teenagers and young
adults are the most avid users of cosmetics and fragrances. This generation is also
very brand conscious, often with the disposable income and a pride in appearance
making them more likely to pay more for premium-priced products that promise
additional benefits.

4.2.3 Social Trends

Social trends change with time but it is important to keep up with these trends.
Knowing what’s going on in the industry and in the market helps brands so that profit
can be maximized.
Now more than ever, there is a lot of money to be made in the cosmetics industry.
Consumers are constantly searching for new products and to keep up with demand,
companies are regularly introducing new products in the market. These products offer
older women a chance to look younger while promising glamour to younger women
(Lennard, 2011).
Magazines have huge beauty sections because advertisers pay a lot of money for
glossy ads about numerous products. So while it cost’s companies little money to
produce items, women and girls will are ready to pay huge amounts of cash to buy it.
Today, beauty goes hand in hand with youth so many women look for products that
will reduce their aged appearance. Looking old is undesirable in today’s society
(Lennard, 2011). As a result, many companies in this industry offer products that
reduce wrinkles, facial lines and spots. These are represented as occurrences that need
to be treated as soon as possible.
Celebrities are used by many cosmetic companies to promote products because it
gives their brand a lot of exposure. While many celebrities might not actually use
these products, consumers truly believe these products will make them look as

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attractive as women seen in movies and on TV. Media has a growing influence over
what is portrayed as beautiful in today’s society (Pitman, 2011).

4.2.4 Technology
The cosmetics industry is continuously growing, now more than ever thanks to the
Internet. Many companies can now sell their products online, making it easier for
some to sell products in countries where they don’t have any representatives (Pitman,
2011). Thus allowing the cosmetics market to become highly competitive.
Today, consumers have access to apps that don’t only show what ingredients go into
certain products but also allow people to see how make-up can be applied. Consumers
are always looking for new techniques.

Social media is also used by a growing number of companies and brands to help them
connect to the public. Tools such as Facebook and Twitter are now used to launch
new products, to give consumers a play-by-play of a show, to get feedback and a
number of other things (Pitman, 2011). Technology has revolutionized the way the
cosmetics industry works.

4.2.5Consumer Data

Convenience While M.A.C. is sold at stores that are located in big malls, smaller
brands like Cover Girl and Almay are sold at drug stores and grocery stores. Visiting
these stores is much easier as they are conveniently located close to your home. One
might rather visit the store around the corner than a mall that may be located as far as
5 hours away.

Competitive Analysis

MAC cosmetics is owned by parent company Estée Lauder and competes directly
with L’Oréal brands Maybelline and Revlon in the Canadian cosmetic industry.
L’Oréal currently holds the top spot in cosmetics. Their cosmetic brand, Maybelline,
makes up 22% of the North American market share. Its affordable pricing and wide
availability gives the brand strength in the Canadian cosmetic industry.
Revlon is another competitor in cosmetics, however it does not fall into the luxury
segment. Revlon can be found away from department stores, in stores like Walmart.
Revlon products are sold at competitive prices while MAC is sold at value-based
prices. Market shares for the top international cosmetic companies are as follows: (in
billions of dollars).

L’Oréal - 25.89

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Proctor & Gamble - 19.57
Unilever - 16.98
Estée Lauder - 8.29
Shiseido - 7.75

a) L’Oréal
L’Oréal is positioned as a business that enables individuals to express their
personality and gain self-confidence. The business brags about their quality, safety,
and efficiency in providing beauty products. The brand aims to provide products for
men and women, but put more of an emphasis on women. L’Oréal has various
product lines including consumer, professional and luxury lines. Their research and
development of the LR 2412 molecule, which is an anti-aging ingredient, has boosted
their image as a brand on the edge of science. L’Oréal has made a very public
commitment to responsible growth through fair trade, educational endeavours and
environmental labeling. Their alignment with causes such as AIDS awareness and
research has raised their profile to the public as well. They’ve been known to make
donations to stop animal testing. In March 2012 L’Oréal donated $1.2 million to the
cause. Their social corporate responsibility paired with the variety of their product
lines have become a huge part of what makes them who they are and defines their
brand.

b) Revlon
Although it isn’t a luxury brand, Revlon cosmetic products are a huge competitor for
multiple reasons. Revlon offers reasonably priced products for the average consumer.
Their competitive pricing makes them a brand to look out for. Their products are
easily accessible. Many chains like Walmart, Loblaws, Pharmasave and Zellers have
the products for sale. The brand has used various celebrity endorsements over the
years to boost their image. Some more recent celebrities involved are Emma Stone,
Halle Berry and Olivia Wilde.

4.3 Brand Analysis

MAC is a professional level make-up retailer owned by Estée Lauder, known for their
high quality product and social responsibility. MAC is trusted by many professionals
and everyday people. The brand has many faithful customers both old and young.
They are most popular with females between the ages 18 to 30. Although the brand
has a vision to offer products for people of all ages, the older demographic is less
aware and less loyal to the MAC brand. MAC offers a high quality product sold at a
value-based price. 5 Their products range from make-up brushes to lipsticks. These
products are available to consumers in 1000 locations worldwide. These locations are
in more than 70 countries and territories. MAC’s large reliance on word-of-mouth
endorsement has been a key to their success. Make-up artists, models, photographers

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and journalists all around the world have shared their love for the product and boosted
the image of MAC as a professional grade beauty brand.

4.4 SWOT Analysis

4.4.1Brand Strengths

MAC Cosmetics is a world-renowned cosmetic company that provides makeup for all
races, ages and sexes. The company’s unique and well-known brand image has
created a strong celebrity following including Mary J. Blige, Nicole Richie and Nicki
Minaj. In addition, the brand receives a vast amount of word of mouth endorsements
from professional make-up artists. MAC Cosmetics prides itself in creating
high-quality, fashion-forward products that are cruelty free while providing
consumers with the experience of being attended to by highly trained makeup
professionals. Furthermore, MAC Cosmetics has a program set-up called the “MAC
Program” that rewards the company’s loyal customers. The “MAC Program” works
by customers returning six primary packaging containers to a M.A.C cosmetics
counter and the customers are rewarded with a free MAC lipstick of their choice. By
doing so, the company is creating a loyal base of returning customers that feel
recognized and important by participating in the program.

4.4.2Brand Weaknesses

MAC Cosmetics does not have a large amount of weaknesses, which in turn shows
how well this company is operated and how much customers love their products
around the world. One weakness the company is facing is that the pricing of its
products are more than the average drug store brands. For the average minimum wage
person, MAC Cosmetics’ prices could be a deterrent to purchasing the product. Also,
the general public is unable to receive the MAC Cosmetic PRO color line, only
professional make-up artists can. By not having their professional color line available
to the public, MAC could potentially be losing customers who are searching for
professional grade, long-lasting make-up.

4.4.3 Marketing Opportunities

MAC Cosmetics has a few marketing opportunities available to them that will
ultimately help generate more sales. Firstly, MAC has the opportunity to create more
freestanding stores rather than having a small spot designated for the company in a
larger department store (i.e. The Bay). As well, there is an opportunity for
International expansion specifically focusing on Middle Eastern countries, as
foundations and blushes are being designed specifically for tanned skin tones. In
society today, consumers have become more health conscious and MAC Cosmetics
has the opportunity to advertise that all of their products are cruelty free and they
contain ingredients of the highest quality. Finally, existing programs like the MAC
return program and the MAC Aids Fund present additional marketing opportunity for

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the cosmetics company. MAC is able to play up their program where consumers are
able to return six primary packaging containers and receive a free MAC lipstick of
their choice. They are also able to capitalize on their existing charitable work in order
to generate greater brand loyalty.

4.4.4 Threats

Threats that MAC Cosmetics is currently facing are mainly competitors. In regards to
competitive threats, competing department store cosmetic companies include
Lancôme, Clinique, and L’Oreal. These brands are similarly priced, easily accessible,
and rival the quality of MAC Cosmetics. In addition, drug store brands like Revlon
and Maybelline, though lesser quality, offer very competitive pricing and are much
more widely available than MAC Cosmetics. Although the economy has a serious
negative effect on several non-essential industries, the cosmetics industry has
remained rather unscathed according to The Economist.

4.5 Marketing Communications Plan

4.5.1 Target Market

In order to increase brand awareness and appeal to a larger audience, MAC Cosmetics
must give more attention to the working women market as they make up a large
portion of cosmetic users.

Primary target

4.5.2 Demographic

The audience of females between the ages of 25 to 50 is a key group to market to

because they are professional women who must look their best and put their best face
7 forward. These women are from the mid to high income bracket and tend to be well
established in their career. It is also important to note that these women are post
secondary educated and search for the best brand of products to use on their skin.

4.5.3 Psychographic
With the current work environment and daily life being fast-paced, the target market
is pressed for time and need to rely on their cosmetic products to last through out their
busy day. Along with living busy lives, these women are socially active,
technologically savvy, and follow fashion trends.

4.5.4 Geographic

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The target market is seen across Canada, with a specific focus on major urban markets.
It is important to penetrate major markets in order to effectively reach the majority of
the primary target audience.

Secondary Target
The secondary target market is females between the ages of 18 and 30, at both
secondary and post-secondary education levels. Students and recent graduates, located
in major urban markets are important for this target market because the majority of
students are situated in the more populated areas of cities. This target market would
be more inclined to utlize untraditional media for information, in the way of social
media and online advertisements.

Marketing Communications Goal (Challenge)

The first marketing communications goal is to stand out among other colour
cosmetics brands among middle-aged, career minded women. The second marketing
communications goal is to associate MAC Cosmetics with a youthful yet
sophisticated and appropriate, on-trendy lifestyle.

Marketing Communications Objectives

The first marketing communications objective is to create an image that is in keeping
with sophisticated, coinciding with trending lifestyles.
The second marketing communications objective is to build buzz for MAC Cosmetics
among women aged 25 to 50 who are currently unfamiliar with the brand.

4.6 Marketing Communications Strategy

Positioning Strategy Statement

We can utilize the existing positioning strategy statement, which is as follows:

“MAC Cosmetics is a youthful, irreverent, cool confident, social & sophisticated

brand”

4.7 Marketing Mix

In order for this campaign to make a strong impact on the primary and secondary
target markets, there must be an effective mix of marketing elements. This mix will
contribute to the success of the objectives set out above. The marketing mix includes

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traditional media advertising, sales promotions, event marketing, and online
communications. The reasoning behind this selection is as follows:

a) Advertising

Traditional forms of media advertising are crucial in order to put across a visual
appeal to the target markets and to achieve brand awareness

b) Event Marketing

An important event will take place that will link MAC Cosmetics to a fundraiser for
female leadership programs. Female leadership and professionalism appears directly
to the primary target and the event will help to generate buzz around MAC.

c) Public Relations

It is important to be well integrated into the public and have the support of the
community. MAC Cosmetics will continue to build awareness in the community by
publishing articles in different medias and educating the public.

d) Experiential Marketing

The main way that customers will get a true experience with MAC Cosmetics will be
through the events in which customers use the products. In store there are also
makeup artists that give customers makeovers using only MAC Cosmetics products.

e) Online & Interactive Communications

The primary target audience is the biggest user of social media platforms; therefore,
these media are both effective and efficient for delivering MAC’s message.

4.8 Advertising Plan—Creative

4.8.1 Creative Strategy

MAC does not have advertising that is readily available for middle-aged
businesswomen. The majority of their advertising occurs online through their
YouTube channel and in magazine ads directed at a younger audience of
20-something. Because MAC is specifically sold in their own specialty shops as well

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as in The Bay stores, it would be 10 beneficial to strategically utilize these stores by
displaying in-store advertisements and posters that are more age-targeted and
appropriate, giving the message that middle aged women can feel comfortable and
confident confronting the MAC staff and counter for their cosmetic needs. MAC isn’t
just for young women and models anymore.

a) Central Theme

All messages will show the vision of a sophisticated, confident, and trend-savvy
businesswoman between the ages of 30-50. As a businesswoman, she leads a busy life,
but choosing MAC as her color cosmetic brand is a no-brainer. The brand has become
a staple in her lifestyle.

b) Appeal Technique

The message will emphasize the target taking pride in her MAC products and
revealing why she chooses MAC over other brands. The appeal will be positive,
showing the ultimately confident businesswoman and the MAC name.
c) Tone & Style

Messages will focus on the women enjoying the product. They will highlight the
product and the confidence in the women.

d) Tagline

Options to summarize the messages are:

 “MAC- Simply, confidently, me.”

 “MAC- We mean business.”
 “MAC- There’s no other.”
 “Mine, and I wouldn’t have it any other way. MAC.”

Creative Execution

The campaign consist of 30-second television ads, color print ads in stores and
brochures, color ads in magazines, billboards, and online banner ads. Selected

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messages will encourage the target audience to visit the MAC website to take an
individual virtual tour of a MAC cosmetic retail studio to get them acquainted and
familiar. They also be able to browse products and testimonials from real women just
like themselves.
Broadcast media feature women exclaiming simple statements about the MAC brand,
how it makes them feel, and why it’s right for them.
Print and outdoor media show images of women glowing, exuberating confidence
because of their MAC products. They will remain trendy yet age appropriate- a
priority for the campaign.

4.9 Advertising Plan—Media

4.9.1 Budget

The budget for the media portion of the advertising plan will be approximately $1.5
million for a one-year period beginning in January 2013 to December 2013.
Media Objectives

a) Who

The primary target is urban women aged 30-50. The secondary target is tech-savvy
women aged 18-20.
b) What

The continuous message will be that established women who lead busy lifestyles can
feel confident with making the MAC brand their choice for color cosmetics, with a
focus on confidence and current trends.
c) When

The launch will take place at the beginning of the year, as part of a new year’s
resolutions effect. Emphasis of the budget will be given during this phase as it is just
beginning in order to gain effective results and impact the rest of the year. There will
also be emphasis for flights around spring, fall, and at the end of the year for the 2013
holiday season, as these are the times of year women are most likely to buy products
to update their looks.
d) Where

The campaign will focus on key urban areas in the nation, such as Toronto,
Vancouver, Montréal, Calgary, Edmonton and Ottawa, but will spread across all
regions.
e) How

The campaign will focus on increasing awareness in the primary target audience
(women ages 30-50), while maintaining the loyalty of the secondary target audience

18
(women ages 18-20). This will take time and will need to focus on ongoing creative
strategies as well as by implementing new, trendy messages for appeal and attention.

5.0 Media Strategy

5.1 Target Market Strategy

The entire campaign focus on profile-matching strategy in order to generate and

maintain trust and interest of the brand with the primary and secondary targets. We
know exactly which consumers we want to reach, and continue to focus and direct
marketing efforts to them.

5.1.1 Market Coverage

The market coverage entail media that will reach nationally, such as nationally sold
magazines that match our age and demographic target audiences, and the website.
There were also be supplementary media focused at impacting key primary and
secondary targets within urban areas, appropriate and unique to each area. These
include posters and billboards.

5.1.2 Timing

The flights outlined take place on a seasonal schedule, advertising according to the
sales trends with a focus on pre-season in order to compete with other brands.

5.1.3 Reach/Frequency/Continuity

Reach and frequency are important to the campaign at the beginning of the phase, as
the key messages are new and will need more emphasis. Continuity is important
throughout the remainder of the campaign, with increased focus during the
pre-seasons outlined. A more detailed media schedule will be designed using gross
rating point levels from market to market.

5.2 Media Selection Rationale

5.2.1 Television

Primary media entail 30-second network advertisements on television. The primary

networks be the Corus Women division of Corus™ Entertainment Inc, which includes
stations OWN, W Network, CosmoTV and W Movies. As well as Slice, a division of
Shaw Media. Each network caters to national women-on-the-go, who are trendy and

19
independent, parallel to our key messages to target audiences. This will provide high
reach in shorter time.

5.2.2Print

Retail advertising beneficial for those urban areas where stores are located. For
instance, The Bay can advertise MAC in their weekly flyers sent out with newspapers.
MAC specific pre-printed inserts were also placed in newspapers in the main urban
cities mentioned.
In keeping with the profile-matching strategy, print ads in magazines specific to the
target audience was also utilized. Paid circulation magazines such as Chatelaine, Flare,
Elle Canada, and Canadian Living fall under this category. This provides an
opportunity for multiple exposures as well as added reach if magazines are passed-on
to other readers. Special offers and coupons can also be placed in issues focusing on
preseason trends, making a flawless connection in the audience’s mind to trends and
MAC.

5.2.3 Out-of-Home

Posters and billboards were used to display the confident women portrayed by MAC.
There were also mall posters located inside shopping malls where MAC boutique
retail stores are located. Although these rely on only pedestrian traffic, the target
audience is already in the malls and will act as a visual to direct the consumer to the
appropriate place.

5.2.4 Online

14 Online banners displayed ads across webpages appropriate to the target audience.
This ads are clickable, and will take the audience directly to the MAC website for
more information.

Online & Interactive Plan Objectives

 To increase brand awareness among career minded women aged 30-50.

 To increase web traffic to www.MACCosmetics.com.
 To link MAC Cosmetics to professional, sophisticated, on trend
lifestyle.

Strategy

20
A combination that involves online banner advertising, social media engagement, and
a new section of the website helps build awareness among the primary target and help
associate the brand with a professional, sophisticated, on trend lifestyle.
Execution

a) Banner Ads

Banner adds were scheduled on the Elle, Chatelaine, and Flare websites that are
popular with professional women aged 30-50.

b) Sponsorship

In conjunction with the Slice television network, MAC sponsored a commercial

segment shown five times weekly. Each day during the 6-7pm programming, MAC
and Slice partner’s to broadcast a two-minute segment on how to apply sophisticated,
on trend make up style in under two minutes. These segments are aimed at the
workingwoman between 30 and 50 who lead very busy lives. A total of 10 segments
were filmed for each season, airing on repeat throughout weekday programming.
These segments will also be available on both the www.maccosmetics.com and
www.slice.ca.

c) MAC Cosmetics Website

An entirely new section were added to the existing MAC Cosmetics website. This
new section offers the above-mentioned video tutorials, as well as suggested products
and additional suggested professional makeup looks with instructions.

Event Marketing Plan Objectives

 To increase the link between MAC Cosmetics and female leadership

programs.
 To encourage top Canadian businesswomen to try MAC products.
 To generate earned media relevant to women between 30 and 50.
 4. To link MAC Cosmetics to professional, sophisticated, on trend
lifestyle.
 5. To encourage brand loyalty among women aged 30-50.

Strategy

 To associate MAC Cosmetics with the Women in Leadership

Foundation and International Women’s Day.

21
  To incorporate MAC Cosmetics in the lives of the target before, during
and after the event.

Execution

MAC Cosmetics presents Women in Leadership Gala

The MAC Cosmetics presents Women in Leadership Gala were took place at 99
Sudbury in Toronto on International Women’s Day (Friday, March 8, 2013). 500
businesswomen from across Canada were invited to purchase $150 tickets for the gala
aimed at raising funds for WIL. In addition, the top 50 most powerful women in
Canada (as determined by the Financial Post Magazine) were also invited to the gala
as VIP guests, free of charge.

Leading up to the event, the women able to register online, indicating their skin tone,
eye colour and hair colour. Given these indicators, MAC send each of the registered
guests a customized sampling of cosmetic products (foundation, powder, bronzer &
blush, mascara and eye shadow). A booklet were included in the shipment, which will
have several sample looks that can easily be done with the makeup provided. There
will be detailed instructions so that busy businesswomen will easily be able to execute
the sophisticated, on-trend looks. Each of the VIP guests were treated to a
complementary spa experience the day of the event. They will receive both pedicures
and manicures using MAC nail polish. They will also have their hair done
professionally. Lastly, the women will receive makeup applications from one of
MAC’s professional artists. By ensuring that all women are wearing MAC products at
the event, we can be sure that they are photographed in MAC cosmetics and ensure
the maximum earned media and word-of-mouth impact. The sample cosmetics and
looks will also allow the guests to experiment with the products pre and post event. In
addition, by paying such a detailed amount of attention to each and every guest, and
allowing them to try out the products, MAC encourage not only brand recognition,
but also brand loyalty among the target market.

5.3 Public Relations

Objectives

 Increase brand awareness among primary target.

 Increase brand loyalty among primary target.
 Link MAC Cosmetics to professional, sophisticated, on trend lifestyle.
 Create buzz about MAC Cosmetics advertising, sponsorships .

Strategy

22
A combination that involves social media engagement, media relations, will help
build awareness among the primary target and help associate the brand with a
professional, sophisticated, on trend lifestyle.
a) Execution

Media Relations Media relations efforts such as media advisories, press releases and
backgrounders will be aggressively utilized to generate media coverage of MAC’s
advertising, sponsored television spot, new webpage and event marketing. Our target
demographic actively read local and national newspapers and stay up-to-date with
television news broadcasts.
b) Social Media Engagement

Social media sites such as Facebook, Twitter and LinkedIn will be utilized to promote
MAC’s advertising, sponsored television spot, new webpage and event marketing to
our primary public. Targeted posts and tweets will raise brand awareness and increase
web traffic.

5.4 Experiential Marketing

Objectives

 Increase brand awareness among primary target.

 Increase brand loyalty among primary target.
 Link MAC Cosmetics to professional, sophisticated, on trend lifestyle.
 Encourage trial of MAC Cosmetics by target public.

Strategy

To utilize interactive marketing in the form of professional make overs in key urban
areas to increase brand awareness & loyalty and encourage trial of MAC Cosmetics
among career minded women aged 30 to 50.
Execution

MAC Makeovers done by MAC artists will be held in the lobby of five business
buildings once per season. Three MAC artists will set up in various professional
buildings in each city for one day, just following the launch of each seasons’ pallets.
As professional businesswomen make their way into work, out for lunch break or out
for the end of the day, brand ambassadors will entice them to get a complementary
makeover. The photographer will take a before picture in front of MAC signage. The
MAC artists will go over several sample professional looks with the guest and then
apply the look in under five minutes. The woman will then have her picture retaken
and will have the option to email the picture to herself or friends, tweet the picture or
upload it to Facebook. If the woman chooses to sign a release, her before and after

23
photos will be added to MAC’s Facebook page as well as www.maccosmetics.com.
Each woman is encouraged to take home a sample bag filled with MAC Cosmetics
including foundation, powder, blush or bronzer, eye shadow, eye liner and mascara.

5.5 Marketing Mix (4P’S)

Further studies into M.A.C, we have focused on their online store, and personally
went into Setia City Mall and explored the M.A.C section in the shop. 4 P’s are the
control in order to best satisfy customers in the target market:

5.5.1PRODUCT

Although M.A.C Cosmetics are in the niche market where the target market is only
female, of all ages and ethnicity. M.A.C sells a lot of different make-up products.

EYE LIPS FACE SKINCARE TOOLS

 Shadow  Lipstick  Foundation  Removers  Brushes
 Liner  Lip glass  Powder  Moisturizers  Accessories
 Mascara  Lip Pencil  Cheek  Solutions
 Brow  Care  Concealer  Primers
 Lash  Primer  Primer  Fragrance
 Primer  Lip Kits & Bags  Multi-Use
 Eyes Kits & Bags

M.A.C products focusses on their ingredients where the products are safe to use by
any one. The safety tests are run by a collaboration of science experts across
numerous places to ensure the quality and excellence of all the products are brought to
the market.

5.5.2 PRICE

M.A.C Cosmetics has developed to be a two billion dollar brand and by many is
considered as a 'path to success'. Products are priced slightly higher than other
competing products, although customers do not mind to pay more for the assurance of
an excellent product. However, due to high prices of certain product, average
individuals are unable to reach them, comparing to L'Oreal, Benefit or Revlon who's
prices are on standard and low-priced. The high variety of products and colours makes
M.A.C very desirable and easy selling.
The prices vary across the products:

EYE LIPS FACE

 Shadow (RM 70 ~ RM 450)  Lipstick (RM 80 ~ RM 110)  Foundation (RM 50 ~ RM 200)
 Liner (RM 80 ~ RM 100)  Lip glass (RM 40 ~ RM 110)  Powder (RM 100 ~ RM 300)
 Mascara (RM 50 ~ RM 120)  Lip Pencil (RM 80 ~ RM 100)  Concealer (RM 50 ~ RM 2000

24
M.A.C offers occasional sales and promotions and offers complementary products
which is defined as Product Line Pricing. Their prices are comparable to competitors
which focuses mainly on customer satisfaction. The company uses multi-segment
pricing as their strategy to target more customers, all achieved by supplying a wide
variety of desired products.

5.5.3 PROMOTION

Buyer power is relatively high as there are enormous number of them in this industry,
they get the brand going and keeping high in the market, the price is average and no
switching costs. That is why M.A.C stands out as the world’s largest make up
company by, following its strategy which is personal selling, one of the most common
forms of promotion.
There's this deal at M.A.C, when you purchase and finish 6 M.A.C products you can
return it back to the store and you'll receive a free lipstick. M.A.C. Cosmetics often
give out free samples to customers at checkout in store and online. If an employee is
helping a customer in store, and they end up not purchasing anything, the employee
might give out custom samples to that person to try to convince them.
M.A.C. Cosmetics have a lot of celebrities that sponsorship their charity/products.
M.A.C. has created a charity called "M.A.C. Aids fund" where all of their Viva Glam
lipsticks proceeds will go to people fighting aids. They get celebrities like Miley
Cyrus, Rihanna, Nicki Minaj, etc, to create their own Viva Glam lipstick so the public
will buy them and help support the cause.
For the fact that M.A.C doesn’t have to include any forms of advertisement, as it is up
to the word of publicity to get M.A.C where it is standing now.

5.5.4 PLACE

M.A.C was originally created to target the artists and photographers due to its artistic
nature. First ever M.A.C store opened in 1991 in Greenwich Village. Nowadays the
brand owns over 1000 independent stores in over 70 countries, with over 30 stores in
Malaysia itself, bringing an annual turnover of over 1 million dollars. M.A.C
Cosmetics as an exclusive brand uses direct distribution as a channel between the
company and customers. Highly glamorous and recognisable stores look very similar
around the globe.
M.A.C focuses on building a close relationship with their customers. As a part of
excellent customer service mac provides face to face consultations and make up
lessons and application in stores. Those services can be booked directly through the
official website or by the phone when it isn't available online.

25
As customers religiously believe in M.A.C's high product standard they are not afraid
of on line shopping if it comes to their favourite makeup brand. Stores on line offer a
huge amount of products coming in all shapes and sizes. The menu is crystal clear and
simple which helps with a shopping process.

5.6 Porter 5 Forces

5.6.1 Threat of new entry

This factor analyses the ease with which firms may enter into an industry.
Competitive industries are likely to attract many firms which will strive to capture a
market share (Aaker, 2001: 23). This is likely to reduce the overall profitability of
firms which are present in the industry. In order for firms to enjoy long term
profitability, they should develop customer loyalty within their industry. This will
ensure that although new firms enter an industry, their market share is unaffected
since customers have faith on their products. Development of customer loyalty is
achieved through innovating new products which meet the unique market needs.
The cosmetic industry has a low threat of new entrants. This is due to several factors.
The first is the huge costs of entry. Developing unique cosmetic products requires a
lot of resources both in terms of research and development and the actual
manufacturing process. Few middle and small scale firms have access to the funds
and expertise required to perform this effectively. Another factor which discourages
entry into this industry is the huge competition present in the industry. In addition to
the huge competitors such as Avon, Revlon, Clinique, Estee Lauder, LR, Sephora and
Unilever, who have a large market share, there are many other small scale competitors
who also have a small market share and who reduce the overall profitability of firms
in the industry.

5.6.2 Bargaining power of customers

The bargaining power of customers analyses the power which consumers have
relating to price changes in the industry. This factor analyses the power which
consumers have in manipulating price changes due to shifts in demand (Aaker, 2000:
102-120). When consumers have a high bargaining power, the manufacturers and
sellers may not adequately predict future demand by the market. This may make them
unable to achieve long term profitability due to unpredictable demand patterns.
The cosmetic has a high bargaining power of customers. This is due to the increase
competition and availability of cosmetic products from a variety of manufacturers.
Since these products have high substitutes, then it is possible for consumers to force
manufacturers to reduce their product prices through purchasing those of their
competitors. This is a challenge which manufacturers of cosmetic products face across
the world.

26
5.6.3 Bargaining power of suppliers
This factor analyses the power which suppliers have regarding making price changes
for their products. Suppliers who have a high bargaining power are able to influence
price changes through using techniques such as market manipulation through
hoarding and restraining supply. Although some of these strategies are illegal in many
countries, suppliers usually apply them when they want to effect price changes (Diller
et. al., 2006: 33-36). The cosmetic industry has a low bargaining power of suppliers.
This is due to the high number of market players and large supply of diverse products
to the market. There are many cosmetic products which are developed by both large
and small scale manufacturers. Due to the huge supply, consumers have the power to
influence the market prices as opposed to the suppliers.

5.6.4 Threat of substitutes

The threat of substitutes arises when there are similar products developed by
competitors which satisfy the market needs. When consumers have access to
substitute products which can satisfy their market needs, then manufacturers and
suppliers lose their bargaining power. Consumers are able to purchase competitor's
products if they are not satisfied with product price or quality. In order for suppliers to
tackle the challenge of threat of substitutes, they have to innovate products which
meet the needs of their target market segments (Keller, 2003: 595-600).
In the cosmetic industry, there are many competitors as has been discussed. There is
therefore a high threat of substitute products. If manufacturers sell their products at
higher prices, or if the products are of low quality, then consumers are able to
purchase substitutes from the many competitors who are present in the market
environment (Gregory, 2003: 77). It is therefore essential for the market players in the
cosmetic to be innovative if they are to tackle the challenge of the threat of substitute.

5.7 PEST Analysis

POLITICS ECONOMY
 Tax policy  Enough attention must be put to economic
 Trade & tariff restrictions stability
 Environmental regulations  Weather conditions/very high-low-temperatures
 Political stability might cause less customers
 Employment laws  Economic growth

27
 Strong legal system
SOCIAL
 Population growth rate
 Age distribution
 Customer behaviour
 Religion/Culture
 Customer orientation
 Customer satisfaction
 Investing for the future
 Limited foreign investment
5.8 Company Performance
28
 Exchange rates
 Possible conditions needed in order to gain
competitive advantage within the market-place
 Condition of competitors
TECHNICAL
 PPC advertising
 Online fit technology to third-party retailers in a
bid to become a fashion technology firm and
improve accuracy for shoppers when purchasing
online
 Barriers to entry
 Production levels
 Retailers are increasingly using online video
content to drive sales and boost customer loyalty
Based on the table extracted from the website, https://www.cosmeticsbusiness.com,
M.A.C Brand, which falls under the parent company of Estee Lauder, from the year
2011 to 2015 shows that, the brand performance has a huge improvement with the
over the years. This shows that, all their efforts in order to advertise the product and
maintain their position shows a positive sign. Over the last half-decade, cosmetics and
toiletries has shown itself to be one of the most resilient industries around, with
beauty brands commanding high levels of recognition, admiration and loyalty among
consumers. The highest ranking brands on 2015’s list is Estée Lauder as per the table.

29
Source: MAC COSMETICS RUNAWAY LEADER IN COSMETICS SOCIAL ENGAGEMENT
REPORT.

According to Stickyeyes research,MAC Cosmetics is the most prominent colour

cosmetics brand on social media, dominating a sector that is largely struggling to
effectively engage consumers.MAC Cosmetics leads ahead of Chanel and Dior in our
social scorecard index, which ranks various social engagement factors to assess a
brand’s effectiveness online. However, whilst there is little to separate the strategies
of the leading brands, there is a notable difference between the third and fourth most
effective brands, highlighting a significant disparity in the strategies of colour
cosmetics brands.MAC Cosmetics’ prominence is due to a highly targeted content
strategy that is fulfilling the needs of consumers, earning shares and interactions on
the key social media platforms including Facebook, Twitter and YouTube.

30
Source : Experian Marketing Service, 2013

The beauty industry sector continues to see its e-commerce market grow. E-commerce
beauty sales soar online over 30% this year. The beauty industry even though highly
competitive, is a very lucrative market for those who can attract the needed website
traffic, convert them into shoppers, and loyal fans of the brand. As per the pie chart,
M.A.C. Cosmetics, has a online market share growth of 4.0%. The enhanced
information published in combination with the convenience of shopping online
through e-commerce sites has helped to increase the e-commerce sales growth for the
M.A.C products.

6.0 Recommendation

M.A.C is an innovative company, the brand loves to make people feel and look good
on the inside and the outside, and it has experienced great success by evolving to stay
relevant. It is easy for M.A.C to stay close to its customers and never lose touch with
them, mainly through their advertisement online, on many websites and their own
official website. The brand has used effective brand management planning to reclaim
the brand and to turn around. M.A.C’s vision and values all revolve around the notion
of individuality, equality and originality.

M.A.C needs a fashion film to have improved and more exciting advertisement and
marketing, the customers are always involved when the company brings something
new and unique to the brand, film advertisement will bring new customers and give a
new meaning and message to people who don’t believe in advertisement through
graphics, this is a unconventional and innovative marketing, breaking away from the
safe and obvious.

31
The brand rarely uses film advertisement to show off their products, there are just few
short films on M.A.C’s website that show new collections with different celebrities.
The fact that M.A.C used basic and easy way to promote the company doesn’t
necessary meant that they have to stay with this technique continually.
It’s always better to improve the strategy if there are possibilities, film advertisement
might help to spread the products more around the world, more audience will be
intrigued by the film. The fact that M.A.C is for everyone means that there should be
also diverse type of advertisement aimed at different type of customers, public want to
have realistic understanding of the products and some believe that graphics and
photography might be professionally Photoshopped to make the products visually
more exciting.

7.0 Conclusion

As the conclusion, it is necessary to say that branding is an important tool of business,

while packaging is a fundamental element of brand. Nowadays, it is not enough just to
develop a beautiful package and to brand the product. It is important to give an idea to
the package that customers are ready to pay more for this package. It was
demonstrated in the practical part of this thesis work, how important a role the
packaging plays in MAC brand’s formation and how it helps to attract customers,

32
which kinds of idea the company puts in its packaging and how it helps to promote its
brand.

Packaging plays a strategic role for any brand, and it can be called as a fundamental
marketing component. Unlike advertising affecting only during the actual promotional
campaign and sometime after it, packaging has a permanent affect, being all the time
in customers’ eyeshot during a product usage. The objective of the package is to
attract customers and instil confidence for products. There is no sense of talking about
packaging design without other components of brand.

Building a successful brand today assumes a strong idea, conception of product,

creative approach for package’s design and high quality polygraph performance. Only
a smart mix of these factors together with systematic promotion of the product at the
market will contribute into trademark evolution into a unique brand.
The MAC cosmetics brand has experienced great success by evolving to stay
significant, developing effective positioning in terms of core values, brand personality,
advertisement and customer relationships as well as constantly delivering the brand
promise over time.

33
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Julie Ozlek (2015). Brand Analysis: MAC Cosmetics. Retrieved from

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34
The Beauty Industry

Forcas:http://illuminationconsulting.com/e-commerce-beauty-sales-soar-online-over-

30/[Accessed on 2/12/2017].

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36
Appendix

(Appendix A) MAC Company Financials Income Statement

37
38
(Appendix B) MAC Company Financials Balance Sheet

39
(Appendix C )MAC Company Financials Cash Flow

40
(Appendix D) MAC Company Financials Ratios

http://illuminationconsulting.com/e-commerce-beauty-sales-soar-online-over-30/

[E-commerce beauty sales solar online]

The beauty industry sector continues to see its e-commerce market grow. E-commerce
beauty sales soar online over 30% this year. The beauty industry even though highly
competitive, is a very lucrative market for those who can attract the needed website
traffic, convert them into shoppers, and loyal fans of the brand.

The online success of the beauty industry has a lot to do with the research-crazy
consumers. Beauty consumers are some of the most educated consumers, who invest
lots of time online researching and doing their due diligence on products, brands, and
benefits. Hours can be spend by a single consumer reading information and details
about a brand, certain products, or anti aging treatments.

41
Consumers frequently research higher-end beauty products online. Brand’s websites
are visited, beauty brand blogs are often read, social media scanned, and independent
sources located to further investigate and research beauty topics and brands.

The enhanced information published in combination with the convenience of shopping

online through e-commerce sites has helped to increase the e-commerce sales growth
for the beauty industry.

Larger brands have noticed this strong increase as well. Some of the larger brands such
as L’Oreal and Estee Lauder have made significant investments in their online divisions.

All beauty brands, small and large can benefit from the growth in beauty e-commerce
by properly executing the basics. A professionally designed website, right technology,
top search rankings (Search Engine Optimization SEO), regular newsletters (Email
Marketing), and Responsive Design (mobile-friendly).

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MAC Cosmetics leads ahead of Chanel and Dior in our social
scorecard index, which ranks various social engagement factors to
assess a brand’s effectiveness online. However, whilst there is little to
separate the strategies of the leading brands, there is a notable
difference between the third and fourth most effective brands,
highlighting a significant disparity in the strategies of colour
cosmetics brands.

The Colour Cosmetics Social Engagement Report, created by

international digital marketing agency Stickyeyes, analyses the social
media strategies of 20 of the UK’s most recognisable cosmetic brands
including MAC, Clinique, L’Oreal, Chanel, Benefit, Estee Lauder,
Clarins, Dior, Maybelline and Lancome. Uniquely, the report doesn’t
just rank the brands that produce the greatest volume of content or
have the largest following but looks at how brands engage with their
customers, where they engage with them and how brands are
benefiting from this engagement.

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MAC Cosmetics’ prominence is due to a highly targeted content
strategy that is fulfilling the needs of consumers, earning shares and
interactions on the key social media platforms including Facebook,
Twitter and YouTube.

https://www.stickyeyes.com/2014/04/23/mac-cosmetics-runawa
y-leader-in-cosmetics-social-engagement-report/

Source :http://macproductdesign.blogspot.my/2012/03/mac-perceptual-po
sitioning-map.html.

I found this Perceptual positioning map on the internet which shows where
MAC sits next to its competitors and other make up brands.

MAC's competitors range from Urban Decay to Bobbi Brown, Benefit and some
high end brands such as Dior and YSL Beauty.

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Source :https://www.slideshare.net/CherryMalhotra/positioning-map-cosmetics.

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