Report by:
Park Cho Rong Ko Imseong Phuong Nguyen Zuri Giang Yu Jiwon Won Yacheong Zhang Jun 2009111532 2011113576 2013130044 2013130047 2011113438 2010113219 2009113181

New Product Management and Pricing Strategy, Dongguk Business School



A. B. C. D. E. F. G. Opportunity Identification Product Proposal Product Protocol Evaluation Design Launch Pricing 3 4 4 5 8 10 11




The first phase is strategic in nature and is the most difficult to describe or define. Our new product is new to the world. Concept Generation: Select a high potential opportunity and begin customer involvement. Collect new product concepts that fit the opportunity and generate new ones as well.

Our new product concept: We found there are various problems of eyeliner.
First, it is difficult for beginners to put on make-up eyeliner. Second, it takes a lot of time to draw because we want to draw eyeliner as detailed and precisely as possible. Third, we often have to fix the eyeliner. The eyeliner will start to smear throughout the day so we need to have remover. Including these problems listed there were many others as well. We concluded that there are two main problems—time and ease of use. We decided to develop a type of stamp so that it is very simple. Our main advantage is SIMPLICITY. Why M.A.C? M.A.C Cosmetics is a well-established brand with about 50 stores throughout South Korea. It‘s a high-positioned brand within the cosmetics industry with a variety of good quality product lines. They also have social initiative programs that support AIDS fund, kids, recycling, anti-animal testing, and Viva Glam program. M.A.C.‘s mission statement is: ―All Races, All Sexes, All Ages‖ conceived to embrace all customers, to be the world‘s 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. M.A.C. aims 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. We believe that our EyeLife product will match with M.A.C‘s premium image and therefore, it will draw more consumers‘ attention as we launch the product. Branding Brand name: M.A.C. Cosmetics Product Name: EyeLife We understand the importance of make-up and especially eyeliners in one‘s life. We aim to develop a single simple product that will save users time but at the same time, keep our customers in style. Eyelife aims to be a part of the customers‘ daily life and to make our customers look and feel good. Slogan/ Headline: ―Simplicity is The Style.‖ Nowadays, in the fast pace living culture of Seoul, customers need a product that will save them time as much as possible but at the same time, keep them in style. With a simple



eyeliner‘s sharp, edgy, and switchable tips for you to change your style everyday without learning how to apply them - everything is in a portable package for you to carry around, EyeLife aims to make your life simpler, make you look and feel good every day and takes less than 5 minutes of your precious time.



EyeLife provides eyeliner stamp products to save time when it comes to preparing makeup. It will help ignite change in makeup methods, lead creative makeup methods, and achieve creative and innovative results by using technology based on basic eyeliner product integrated into an innovative and creative technology of eyeliner. The product may be used by both professionals and unprofessional in any industry that requires the use of makeup. Our customers are primarily located in Japan, Korea and in nations that have a fast paced culture. Potential young customers and associates will be our primary distribution channel. We will be specifically targeting consumers who spend a lot of time putting on eye makeup or have an interest in using eye makeup as our product is meant to save consumers time and make it easier for them to use our product. We aspire to grow 5% for the first few years that our product is introduced to the market by expanding and improving our product to our potential customers. The product will build our image and brand identity. By building our brand image and identity, we hope to expand our product line. Integration of our product is our key approach and we will release the product as soon as we can. Our product will be protected by patent.



I. Target Market: Our customers are primarily located in Japan, Korea and in nations that have a fast paced culture between the ages of late teens to late thirties. II. Product Positioning A fast and easy way to apply eyeliners III. Product attributes  Application of eyeliners should be simple and fast. The lines are sharp and even on both eyes.  Product includes eyeliner remover for correction.  The product is designed to be portable IV. Competitive comparison None: New to the world







Top-two-boxes: I would definitely buy I would probably buy I don‘t know I would probably not buy I would definitely not buy

10% 57% 15% 11% 7%

We have a concept test about our new eyeliner. As shown, 10 percent of respondents said they would definitely buy the eyeliner and 57 percent said they would probably buy it. So the top- two-boxes score is 10+57= 67percent. II. A-T-A-R MODEL: Awareness: M.A.C is a famous international cosmetic brand and it is the major-brand for the cosmetic market in Korea. Because of high level of recognition, we assume the awareness rate is 70%. Trial: Based on the top-two-boxes score, we calibrate as 80% of ―definitely‖ actually buy and 30% of ―probably‖ actually. We assume the percentage that will be among the first to try our new eye liner is 80%×10%+ 30%×57%= 25% Availability: In Korea, there are 49 counters in the department store and only one directsale store in 압구정. So we estimate the availability rate is 65% Repeat Purchase: We estimate the share of purchases of the new eyeliner among those who tried the product is 60%.


80% 70% 60% 50% 40% 30% 20% 10% 0%


Above all: Market share = awareness× trial× availability ×repeat= 70% ×25%×65%×60%= 6.8% III. HOUSE OF QUALITY:



Roof Strong positive ◎ Positive ○ Negative × Strong negative#

matrix strong ◎ medium ○ weak △

Through our HOQ matrix, we found that the convenience, varity, and smudge free are our advantage and these customer attributes can also translate into technical specifications easily. But we need to improve simplicity of our new product in order to convert to engineering characteristics effectively. So our new eyeliner has superiority in the convenience, variety, and smudge free category because most of engineering characteristics are not mutually exclusive. But we still have to balance the weight of stamp tip, changeable tip, and remover. At the same time, through the central grid, we can identify the smudge free will affect the eye makeup remover negatively. Because our new eye liner has strong ink. Obviously, it would require more cooperation between marketing and technical personnel.


Support M.A.C‘s Identity.

EyeLife is inspired by M.A.C‘s other product line—Lipstick. We want customers to notice t hat it is M.A.C‘s cosmetics once he/she sees it. M.A.C‘s Lipstick is so famous that every ma ke-up user really loves its design. Therefore, we used black and silver color and make it wit h similar shape with lipstick. A different thing with the lipstick is that EyeLife has two caps on both sides of its body and it is a little bigger.

II. To better meet Customer Needs


1. Solve Problem: EyeLife is designed to solve current problems that customers had. Normal pencil type eyeli ner has a sharpener on the tip, but the customers don‘t use it often. Normal eyeliner doesn ‘t have eye remover to correct eye line when a customer makes a mistake. Since EyeLife is a liquid type, we don‘t need the sharper anymore. Instead, we attached a balm type eye re mover on the opposite end of the tip. The customer can easily correct her eyeliner and eve n use the eyeliner as an eye shadow. After putting on eye liner, they can use eye remover o n the edge of the line. It become light and looks like wearing eye shadow.

2. Universal Design: Since we targeted makeup beginners and even men who are not familiar with putting on eyeliner, we made a simple design. Every customer can use EyeLife very easily. Once he/she turns the body of the product, the ink will travel up along the body and spread evenly throughout the tip. The only thing he/she has to do is stamp it on his/her eyes! 3. Portable Size: The length of EyeLife is 13cm and the diameter (thickness) is 2.5cm. It is the right size to c arry every day in a makeup pouch bag. Some of pencil eyeliner is too long that customer ca nnot put it on the pouch and some of liquid eyeliner is too short to put on. We tried to sol ve these problems. Someone who does not use eye remover very often can take it off and c an carry only the eyeliner because it is detachable. It becomes smaller and much easier to c arry.

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III. Better Shape for Human Body 1. Consider Eye Shape Some Asians have a single eyelid and some have double eyelids. We assorted the shape of the tip into two types: single eyelid / double eyelid and the thickness of the tip: thin / normal / thick. Eyelife has six types and gives customers a choice in terms of his/her eye shape. 2. Consider human hands EyeLife is not too small (thin) or big (think) so it is suitable for every woman and even man to put on eyeliner. Oval shaped body can improve grip feeling as well. IV. Environment Eyelife thinks about the environment as well. It consists of two parts, which are eyeliner tip and remover. Customer can refill the eye remover for a very reasonable price. After using up the eyeliner, M.A.C gives a discount as a promotion which is called ‗M.A.C to back‘. If t he consumer gives back six of the eyeliner container then the customer will be able to recei ve one free lipstick in return.


1. Strategic platform decisions a. Type of demand sought – primary demand In order to create new need of Eyelife M.A.C should develop an entry strategy with the emphasis on stimulating primary demand for the product category. b. Permanence: ―Stay if we meet our goals‖ This strategy is useful for Eyelife be cause the firm is using the new product to enter another sphere of activity. c. Aggressiveness: Eyelife aggressively enter the market; to earn innovators and ‗early adopters‘ attention. Most of the promotional dollars would be spent ea rly, and most of the resources go to getting early trial.

1 M.A.C EYELIFE -- ―SIMPLICITY IS THE STYLE‖ 1 d. Competitive Advantage: Eyelife‘s competitive advantage is differentiation. N o cosmetics brand has stamp-type liner. e. Product Line Replacement: downgrading existing product. f. Segmenting a market: Behavioral and benefit segmentation; targeted to wom en whose lifestyle is busy and professional so make up is important but want t o save time and women whose needs are benefits derived from eyeliners suc h as long-wear or simplicity. 2. The Launch Cycle

Preannouncement: Based on brand equity of MAC‘s, Eyelife preannouncement is used to
hype interest in the upcoming product, to keep current customers from switching to a com petitor, and to encourage prospective buyers to wait for the new product. There is no attem pt to make it secret. A. Non disclosures B. Product testing—beta testers such as cosmetic product related bloggers and 20-30s career women C. Anticipation: if the problem found in previous session, tell about the pr oblem being solved. D. Broadcast PR: full press release on and off line E. Promo pieces: start of advertising such as pop-up store where may you ng women pass by and aggressive promotion event in store. 3. Launch Tactics  Promotion: EyeLife would be promoted by publicity. Publicity is effective for new a nd controversial technologies with high-perceived usage risk. Many of customers wo uld hesitate because of new way of wearing eyeliner. They need some assurance of t he product. So publicity would explain and generate much review of EyeLife.  EyeLife is HIGH RELATIVE ADVANTAGE AND LOW COMPATIBILITY. Therefore, the barriers to trial should be eliminated.  Preannounce: utilize MAC marketing and distribution channel  Broad product assortments: changeable tips  Information-based promotion: demonstration video showing a person use actual product.  Selective distribution: control supply based on degree of potential segments. 4. Methods of Market Testing: If Eyelife market test should be conducted… Simulated test market (Pseudo Sale Market) method is most suitable. Get estimates of trial purchasing and repeat purchasing.



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We asked 60 customers to submit sealed bids for our new eyeliner. The data has been shown that this method elicits the willingness-to-pay measures from the customers. More than 60% customers want to pay higher than 25000 won. We can then calculate the projected profits from charging any price through the follow formula: Profits = (P-c) x Q (P) Using the formula, we can calculate the profits for many candidate prices. As shown, maximizes profit is 1040000 won. So our price of new eyeliner is 30,000 won.