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Gabrielle Darby Dr. Julie Joseph Marketing Plan 7 February 2011 Marketing Plan: M.A.C. Cosmetics Executive Summary MAC Cosmetics is a company that manufactures in cosmetics that originally targeted professional make-up artists, but now sells to customers all over the world. In the company description, I briefly illustrate the company and the overall reason for its existence. In this section, I will also go into detail about the companys products and services. The companys mission statement lays out the purpose and explains the goals and overall vision of the company. The objectives are then precisely stated in great detail in which the dates, times, location, etc are in relation with the company. I have then prepared a situational analysis identifying the internal strengths and weaknesses and examining the external opportunities and threats. An evaluation of the target market is then presented demonstrating key components such as demographics and customer types that the company pursues to attract. The next section is a compiled list of key competitors of the MAC Cosmetic company which includes the strengths and weaknesses of that particular company. The heart of this marketing plan for this company is the marketing mix which specifies in extreme detail the strategies that help make the company what it is: product strategy, price strategy, promotional strategy, and place (distribution) strategy. The next section includes the budget which gives an estimate on the cost for carrying out the plan as well as a

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breakdown of certain cost during any given year. The schedule then details each responsibility and who will carry it out. Company Description MAC Cosmetics is a company that is designed to enhance the natural beauty of those that most desire it. Our products are created with the mindset of professional makeup artist quality of cosmetics. We offer more than 100 shades for the eyes, lips, and face and are continually designing more products to adhere to the demand. We specialize in quality customer service and our dedication to our customers. Also, we ensure that our products are adequately equipped to satisfy the customers wants and needs and if not we are held responsible for the costs. We offer a wide range of services such as a makeup tutorial in given stores where theres a MAC booth as well as samples of our products. Along with these services we offer a free sample of our products when you recycle the containers. We are aware that not everyone is able to afford some of our products; so therefore, we offer our wholesale products at discounted prices at selected stores.

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Company Mission Statement The mission of M.A.C. Cosmetics is to be the worlds leading professional makeup authority among both professional makeup and consumers, whilst staying true to the MAC credo of the motto All Ages, All Races, All Sexes. Founded in 1984, M.A.C. is known as one of the most creative and influential cosmetics brands. As an organization, it commits itself to high standards and creative delevelopment with an enterprise concept that all pains have gains. In the past two decades, M.A.C. has been integrating fashion, pleasure and imagination, respecting the two equal rights of peoples all races, genders and ages, engaging itself in AIDS prevention, fighting against maltreatment, supporting environmental protection, and pursuing other charitable products. M.A.C Cosmetics is committed to its corporate social responsibility by protecting the environment irrespective of time and place. To this day, M.A.C. Cosmetics ensures its customers and consumers the loyalty that was established with their brand from the very beginning. Objectives of the Plan The objectives for the next five years are to increase productivity by continuing to publicize by word of mouth instead of putting up extra expenses in advertising. The overall goal is to obtain a net profit greater than in the previous years. Rely solely on public relations in consumer fashion and beauty press Evaluate the coverage of the MAC AIDS Fund Increase the number of return customers by 10% Obtain a market share growth of 5% Reach a net profit of $700,000 at the fifth year end mark

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Situation Analysis SWOT Analysis To determine the internal and external environments of M.A.C. Cosmetics, the main focus should be on the organizational resources. The strengths of M.A.C. Cosmetics are th4e advantage that most of their customers are brand loyal and therefore, they get constant sales. Also, most of their customers are professional makeup artists who in return use the products on other professional people. This gives an increase on financial resources. M.A.C.s marketing skills are really good and so are their public relations. Most of their resources come from those professional makeup artists who are promoting their product to other consumers by a way of magazine articles/covers, fashion shoots, fashion runways, etc. Their experience is global (multinational) with just about ten key markets (UK, Australia, France, Greece, Germany, Spain, Japan, Hong Kong, and Middle East, Korea). Dealing with their weaknesses, M.A.C. could improve their advertising. The fact that they dont advertise saves then money, but their marketing skills are at a standstill. They also should improve their products by packaging them in larger containers to obtain a greater volume and quantity. In examining the external opportunities and threats, a process called environmental scanning had to be done. This process includes the collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. The interesting trends are the social factors; M.A.Cs products get publicity by word of mouth and the sales of that product increase. A profitable addition would be products that are for sensitive skin or saling products at a lower price to fit all demographic settings. Changes in the market would include new customers, but keep the same product (market development); this would increase the market share. Some of the threats would include the

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obstacles of other makeup companies potentially taking over M.A.C.s customers. Other obstacles would be not having enough aggressive sales which lead to lower profits. Also, if production is down, then the capability of the firm is not all that great. Essentially, M.A.C Cosmetics needed to understand the current and potential environment that the products and services can be marketed in. Target Market M.A.C Cosmetics has never tried to target a certain group of people, but essentially the people in the high fashion industry are the target market of this company. M.A.C. Cosmetics doesnt discriminate against ethnicity, gender, lifestyles, or age. At the beginning, M.A.C. struggled to get their company started, but now a multimillion dollar enterprise the market matured by new consumers becoming a part of the target market and some dropped put. M.A.C. Cosmetics attracts those that are rich or poor, old or young, conservative or trendy, and even for males and females. This target market is roughly large given the fact that a specific target market is not identified. As far as geographic are concerned, M.A.C Cosmetics use a global strategy (differientied) by going global with a local focus. With sudden changes in the environment and consumers constantly adjusting their needs and wants, M.A.C. has to keep us with these adjustments by reshaping the marketing mix to make it become more effective for the consumers. By adopting into the growing economy, then new and improved opportunities arise which can make the market achieve success.

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Competitors and Relevant Information There are a number of makeup companies that are competing for the same amount of customers, sales, and formal recognition as M.A.C. Cosmetics has. One of the competitors of M.A.C. is Ulta; their strengths are the fact that they not only have makeup for men and women, but for babies and teenagers as well. There is a special section dedicated just for men while M.A.C. is unisex. Another strength is the company is not just for professional makeup artists, but has a reputation of dealing with salons. Their weaknesses include that they are not global and only have a total of 389 stores in 40 states, stores are located in off-mall areas with high traffic, and their products are not sold in a readily available place for customers. Another competitor of M.A.C. Cosmetics is Avon. Their strengths is that consumers can choose their own service whether they want to shop online with a representative or locate your own representative in your area. Also, their products can be accessed 24/7 as well as a free personal delivery every day. With the company Avon, anybody can sell their products and work from home, work online, and create your own hours. Their weaknesses are that there isnt really a store where you can go and buy the products like M.A.C. and its only a company for women; this cuts the target market in half because its only created for one gender. Also, Avon just started becoming international and selling their products overseas. MaryKay is one of the best personal sellers of cosmetics known. Their strengths include an ECatalog where you can shop anytime of the day, products are readily avaible upon request, and there are always representatives to adhere to your needs. Also, MaryKay uses a pull/push approach with the MaryKay parties that they throw; the representatives throw the parties and use the products on the customers (push) and then those customers like the affects from the products,

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they buy them (pull). Also, MaryKay has products for men and women. Their weaknesses include that they dont have a wide range of products, they do not have a global focus, and their promotion is word of mouth instead of business to business. All three cosmetics companies are unique in their own way and have qualities that make their business successful. Marketing Mix Product Strategy Product is one of the first Ps of the marketing mix. It is the core of the organization and is sometimes known as a service or a good (soft or hard). They also can be classified as either business (industrial) or consumer products, depending on the buyers intentions. M.A.C. Cosmetics offers various services such as makeovers, free samples of their products, and mini trials. Since a service cannot be packaged, it is difficult to say how M.A.C. goes about presenting them. M.A.C uses a global approach when taking their products around the world. Since they are involved with about ten key markets, they are able to offshore. Their products such as eyeliner, lip gloss, and foundation are a split between a shopping product and a specialty product. M.A.C sells more than just one product, but a variety of other goods. The lip gloss Viva Glam is M.A.C.s product item, which is designated as a distinct offering among their products. The product line of M.A.C is lip gloss which Viva Glam is included in that product line. The product mix is eyes, face, lips, brushes, nails, skincare; etc which includes all the products M.A.C. sells. Each of these items requires a separate marketing strategy in order to get the best sell. Just recently, M.A.C. Cosmetics joined with the superhero Wonder Woman to enhance her beauty. They state that Wonder Woman gets her own cosmetic line because even superheroes need some color too. The collection consists of blush, eyeliner, pigment, lashes, lipstick, lip gloss, and eye

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shadow. This is known as co branding, but specifically cooperative branding where Wonder Woman and M.A.C. Cosmetics unite together and borrow on each other brands quality. This evaluation of products is known as product development where a company keeps the same customers, and comes up with a new product. M.A.C. uses specific procedures when packaging their products, but not just because they need for it remain safe while shipping but for it to attract the customers eye. Price Strategy Price is a very important competitive weapon as well as important to the organization because price multiplied by the number of units sold equals to the total revenue for the company. It is something that sigiven up in an exchange to acquire a good or service. It is the most flexible and is the quickest to change because marketers can adjust it according to the market. M.A.C. uses certain strategies based on consumer/customer habits in order to make the best decision on what price a product should be held at. When M.A.C. introduces new products they have to put into consideration what potential buyers will do and how they will evaluate the price of each one against an already existing product somewhere else. They also, put items online because the Internet makes comparison shopping easier for its customers. They have adopted objective called profit maximization where M.A.C. sets its prices so that total revenue is the largest it can get relative to total costs. They also use return on investment (ROI) which measures the managements overall value in generating profits with the available assets. M.A.C. is known for its status quo pricing where theyre always competing to match other competitors prices such as Mary Kay and Ulta. M.A.C has never been in a situation where the demand was so high that there wasnt enough supply; there has always been some type of balance between the two. With the new cosmetic line with Wonder Woman, they how to achieve inelastic demand

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since this is a new product. This can ensure M.A.C. that when they increase prices slightly; it will not affect the demand for the product significally. The Wonder Woman Cosmetics Line is in the introductory stage in the product life cycle; the price of products is set high to recover development costs quickly. With this new line, they have adopted prestige pricing to help promote the image of Wonder Woman the superhero. Promotional Strategy Promotion includes advertising, public relations, sales promotion, and personal selling. The main role is to bring about exchanges with target markets by informing, educating, persuading, and reminding. A really good promotion can increase sales. M.A.C. uses sales promotion to their advantage because directly affects attitudes and behaviors. The objectives of sales promotion depend on the behavior of the consumers. M.A.C. uses the frequent buyer program to strengthen their brand loyalty. They offer rewards such as free samples of products or makeup tutorials on a customer for their repeat purchases. For loyal customers, M.A.C. uses the custom made profile online to give their repeat customers an incentive to stock up on their products. M.A.C. doesnt really use things like coupons, rebates, or premiums because they have enough products and loyal customers to make up for what they might lose in a months to years span. M.A.C. Cosmetics does a lot of sampling with their customers. Stores are designed and set up where specific items act as end caps, but are actually there for customers to test out and potentially buy. This is a unique way the M.A.C. does their promotion; they feel that the items will speak for themselves. Point-of-purchase display (POP) is used a lot with M.A.C. because this is where most of their sales come from. M.A.C. stores are worldwide, but there are some cities that do not have the actually store, so they have these displays in easy targeted department stores like Macys. Large signs and shelf extenders capture buyers attention and on impulse they

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are attracted to buy. M.A.C. gets a lot of their promotion done through online sales because the generation today is digital and frequently uses the Internet. This creates the pull/push strategy once again because consumer promotions pull the product through the channel by creating a strong demand. Then in return, the trade promotions that M.A.C. Cosmetics does such as POP push the promotion through the distribution channel. They dont do a lot of personal selling because they expect for their products to sell themselves. Networking is done a lot in this company by word of mouth to promote their products to expand their target market and increase sales. Place (Distribution) Strategy Place, or distribution, deals with making products available when and where the customers want them. Most of this P concerns the physical aspects of it; it involves all of the business activities concerned with storing and transporting the finished products. It involves with geographic and the type of retail. M.A.C. Cosmetics goal is to make sure that all of its products are in order and get to its destination safely. M.A.C. reserves the right to make sure that the products that they sell to the consumers are not resold at any point in time by another consumer. They are known for their excellent customer service and follow the management process. It presents a unified response system to the customer whenever complaints, concerns, questions, or comments are voiced. They do the best to have a positive impact on those who have complaints and try to work them out precisely. Since M.A.C. uses a global strategy, they outsource a lot. Their products are mostly international and multinational, so the job and/or task are done externally. They try to reduce the cost of the raw material needed to make the products and purchasing professional at M.A.C. negotiate to get the lowest price possible from suppliers of the things that are of necessity for certain products. Within M.A.C.s supply chain control, they use

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and effective inventory system that develops and maintains an adequate assortment of materials/products to meet the customers need. Their goal is to keep the inventory levels low while maintaining enough goods in order to meet the customers demand. Dealing with retailing in the place strategy, M.A.C. Cosmetics sells their items in department stores like Dillards and Macys and in their own specialty store. The type of retailing that response well with M.A.C is electronic retailing (online retailing). This is the type of shopping available to consumers with personal computers and access to the Internet. Sales are increased this way and is less costly and extremely convient.

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Budget Year 1 Projected Sales Projected Profit $1.5 million 500,000 Year 2 $3 million 1,500,000 Year 3 $4 million 3,550,000

Marketing Expenses Product Development Advertising Promotion Product Samples 10,000 120,000 30,000 5,000 95,000 25,000 15,000 250,000 35,000 200,000 0 0

Initial License Fee Training Service Development Additional Funds/ Working Capital

25,000 2,500 70,000 30,000

0 1,250 75,000 50,000

0 1,250 75,000 45,000

Total Marketing Expenses

487,500

251,250

421,250

Net Profit

12,500

1,248,750

3,128,750

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Schedule Action Finalize Product Features Create Page on Social Network Create/ Update Website Launch Ad Campaign Increase Sales Launch Global Network February April May-August November Advertising Manger Advertising Manager All parties involved President Timing December December Responsible VP Marketing VP of Sales

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