You are on page 1of 18

Final Project- Marketing Strategy

M.A.C. Cosmetics

Casey Walters

caw13m
Final Project – Marketing Strategy

M.A.C. Cosmetics

Product and Competitive Environment

M.A.C. Cosmetics is one of the big name brand makeup companies in the world today. It

was founded in 1984 by Frank Toskan and Frank Angelo in Toronto, Canada (Chesters, A.,

2011). Today, they are owned by their parent company Estee Lauder. Estee Lauder purchased the

controlling interest of the M.A.C. Cosmetic company in the year 1994(M.A.C. Cosmetics

website, 2016). Because of how established Estee Lauder already was M.A.C. was able to

expand quickly and open stores internationally. As word of the brand spread across the world so

did their reputation. M.A.C. was one of the first companies that made sure their employees were

experts in the cosmetic industry (M.A.C. Cosmetics website, 2016). Not only is the brand and

product high quality, so is their customer service. Customers can enter a store and have someone

with knowledge assist them with products, colors, and techniques.

M.A.C. Cosmetics was originally created for professional use. Professional makeup

artists and the fashion industry were frustrated with the lack of color pigment in the makeup.
The two founders started creating makeup in their kitchen and sold them through a hair salon.

The first people that bought these products were other makeup artists, and models. As word

spread about the makeup the company began to grow. The products were exclusively available to

professionals, but the models and artists like the products so much they wanted to share with

their friends and family. Eventually this lead the company to open their doors and products to the

general public to purchase (M.A.C. Cosmetics website, 2016).

One of the main differences between M.A.C. Cosmetics and other cosmetic brands is

their dedication to color. While other brands focused on the skin care aspect of cosmetics,

M.A.C.’s main focus was to enhance the colors and pigments so they showed up in photographs.

The brand is proud to call themselves the “ultimate color authority” when it comes to cosmetics

(M.A.C. Cosmetics website, 2016).

While M.A.C. is known for its pigmented color, other cosmetic companies have changed

their products. Other brands have created bright and vibrant make up in order to promote a better

product and compete in the field with M.A.C. According to MBA Skool (Mac Cosmetics SWOT

Analysis, n.d.) some of the brands that are a competition for M.A.C. Cosmetics are:

Clinique Laboratories LLC (New York City, New York): Clinique is a well-known brand

that focuses on the skin. While they have a wide range of products, people really like this brand

to improve their skin. The company was founded by a dermatologist that wanted to show people

they weren’t stuck with bad skin. (Clinique website, 2016)

Revlon (New York City, New York): Revlon has a wide range of cosmetics that are

typically sold for in convenience and grocery stores. Compared to other brands in the cosmetic

industry they are typically more affordable for people. Revlon also has some hair care products

that they produce. (Revlon website, 2016)
Maybelline (New York City, New York): Maybelline is another cosmetic brand the is

more affordable on the price spectrum. They have a range of different makeup products that

come in an array of colors. Maybelline products can usually be found in convenience and

grocery stores. (Maybelline website, 2016)

The largest competitor for M.A.C. Cosmetics is Maybelline (“Mac Cosmetics SWOT

Analysis”, n.d.). Maybelline has a similar product style to M.A.C. Cosmetics. Maybelline has a

lot of vivid and bold color options so their customers can experiment and express themselves.

This is similar to the concept that M.A.C. follows to attract trendy young customers into their

stores. Maybelline also has a competitive edge with their locations. Their products can be found

almost on every corner. Their products are sold in most convenient and grocery stores. That put

their products in very accessible location for customers to run in and grab something.

In respects to attracting Hispanic customer Maybelline has printed advertisement and

produced a number of commercials in Spanish to further their reach into the market. M.A.C.

Cosmetics doesn’t have a lot of advertisements in Spanish. A lot of their commercials don’t have

or have very little language involved in the video. They have created advertisements that don’t

necessarily need to be explained, they are just showcasing the product its self. This is a great way

to show the products and show examples of different looks that can be created.

M.A.C. Cosmetics has commercials that can be viewed and understood by most of the

customers. They don’t directly target the Hispanic customers that are being targeted by other

brands. Maybelline is one of the brands that has specific commercials that are in Spanish in an

effort to reach the Hispanic markets. M.A.C. is going to need to implement specific marketing

strategies in order to expand their customer base.
Marketing Objectives

M.A.C. Cosmetics needs to incorporate the values that resonate with the Hispanic

community in order to gain their attention and business. The Hispanic market is a very important

market to get involved in because of their projected spending power. It is estimated that by the

year 2050 nearly one fourth of the woman population in America will be made up of Hispanics

(Summers, G., 2015). It is also estimated that Hispanic woman spend about three times as much

money on beauty products per month then the rest of the population (Summers, G., 2015).

M.A.C. has collaborated with celebrities to make new lines of makeup. These

collaborations bring attention and revenue to the brand. In order to connect with the Hispanic

markets M.A.C. recently created a line of products based the celebrity Selena Quintanilla, who

passed away in 1995. Even though she passed away Selena represents a wide range of the

market. Selena provides a unique opportunity for M.A.C. to market several cultures at once.

“Selena’s cultural duality demonstrates that it’s possible to embrace both American and Latino

cultures which is massively empowering to Latinos and part of her appeal today” (Aroman, J.,

2016). The Selena line brought in huge amounts of Hispanic fans, who waited in lines to
purchase the products. Not only does Selena bring in revenue from fans she also peaks interest

from people who don’t know what the new makeup line is about.

While, Selena is a great way to grab the attention of customers, specifically Hispanic

customers, it is important to show a genuine interest in the Hispanic community. M.A.C. chose

well. They did not just pick any famous Hispanic person. They picked someone who has a great

influence on the community and still relates to other populations. Since M.A.C. created this

interest they should continue to focus on Hispanic values and market towards this population.

Target Segment and Justification

Hispanics place a very high importance on health and beauty. According to

Nielson, several health and beauty products are the top things Hispanics but that are not edible.

The Hispanic consumers that are purchasing the products are a younger group. The median age

of the group is twenty-seven years old (“Beauty Is In…Beholder”, 2015). The consumers are

younger and with the projected population rate the Hispanic market is going to be a large

segment in the cosmetic industry. Because of the potential buying power and the importance on

appearance Hispanics are growing the cosmetics industry and are an important group to target.

But, not all Hispanics can be targeted the same way. Nielson segmented Hispanics into four

groups when buying cosmetic products. They are:

Latinistas: Latinistas mainly have a Hispanic background and are traditional with their

culture. They are usually the children or grandchildren on immigrants and speak Spanish. While,

they prefer Spanish Latinistas can speak English when they need to (“Beauty Is In…Beholder”,

2015).
Heritage Keepers: Most of the Heritage Keepers speak both English and Spanish, but

rather speak Spanish. They are broadminded, but mostly centered around their Hispanic

background. They are mostly first generation people and they focus on conserving their culture

(“Beauty Is In…Beholder”, 2015).

Savvy Blenders: Savvy Blenders are very modern. They want to keep their Hispanic

culture, but also want to blend cultures. They also speak both Spanish and English (“Beauty Is

In…Beholder”, 2015).

Ameri-Fans: Ameri-Fans are the group closest to mainstream markets. They are very

modern with a little Hispanic background. They are typically not first generation and speak

mostly English (“Beauty Is In…Beholder”, 2015).

While, all of these segments contribute to the cosmetic industry the Savvy Blenders and

the Ameri-Fans are the two group that will expend the most in the cosmetics industry (“Beauty Is

In…Beholder”, 2015). It is important for M.A.C Cosmetics to understand the purchasing

behavior and interests of Hispanic customers if they want to reach that market. They will have to

implement specific strategies to reach the correct audiences.

Media Resources and Strategy

M.A.C. Cosmetics has a very large social media presence. YouTube, Twitter, and

Facebook are the main ways that M.A.C. promotes their products through media. They post a lot

of photos featuring their new products and current promotion that the company has. The social

media accounts allow the company to interact with their customers on a personal level. On

YouTube M.A.C. has video to show people different way to mix the products to achieve a certain
look. All of these posts are posted in English. If M.A.C. is to expand their Hispanic customer

base they could make posts in Spanish or have an option to translate the content into Spanish.

Facebook is a good media outlet to reach Hispanic customers. According to the Pew

Research Center seventy-three percent of Hispanics on the internet are on Facebook (Krogstan,

J., 2015). M.A.C. is right where they need to be to reach all of the Hispanic segments. The Savvy

Blenders and Ameri-Fans may respond to the current social media posts, but they also keep some

of their culture. So, M.A.C. may be able to gain more customers by appealing to the Hispanic

culture.

Like most retail stores M.A.C. Cosmetics has their own website where customers can

look at all of their different products the company is currently selling. People often purchase item

while on the site or look at different reviews other customers have posted. At the bottom of their

web site M.A.C. has links to all of their social media accounts so customers can find their pages.

Their site also has a link that says Español. Customers can enter the site, click that link, and all of

the text is translated into Spanish. This is a nice feature to have so Hispanic customers who

prefer, or don’t know a lot of, English can have the same access to the site and products.
Besides adding to their existing media strategy, M.A.C could look into other media

outlets to expand their Hispanic customer base. There are several different media sources that are

effective to use in order to reach the Hispanic community. According to the Pew Research

Center’s Hispanic News Media Fact sheet, there are several completely Spanish television

networks and radio stations (Shearer, E., 2016). M.A.C would benefit from creating

advertisements that are aired on these different media networks.

M.A.C. Cosmetic motto is, “All ages. All races. All sexes” (M.A.C. Cosmetics website,

2016). Their company ideals are a key point that should be represented in the advertisements. It

shows that the company is accepting of all people and who they are. This is important because it

is a way to connect specifically with the Savvy Blenders and Ameri-Fans. Both of these

segments are more progressive groups (“Beauty Is In…Beholder”, 2015). They are interested in

blending their cultures and M.A.C is a company that is all about accepting from all different

kinds of backgrounds. M.A.C. should look into incorporating the company’s ideals into their

media strategies.

M.A.C. has implemented a few different aspects to attract Hispanic customers. While, the

steps they have taken are a good start, their efforts are not worth it if the Hispanic audiences are

unaware of what they have done. M.A.C. should create advertisements that showcase their brand,

products, and ideals in media outlets that reach Hispanic audiences.

Positioning and Message Strategy

M.A.C. Cosmetics as become one of the major cosmetics companies in the industry

today. They built their brand reputation on professionalism and quality. As a result, customers are

very loyal to the brand and enjoy the products and experiences in the store. M.A.C. needs to
improve their credibility within the Hispanic markets in order to gain Hispanic consumers.

According to Nielson, Hispanic people place a high value on personal appearance and beauty

(“Hispanic customers…Sales”, 2015). The high value placed on the products leads Hispanic

customers to put more thought into their decisions (“Hispanic customers…Sales”, 2015). M.A.C

should take into consideration what drives Hispanic customers to buy certain products. They can

then use the discovered reasons to help build a better marketing campaign to reach these

customers.

As mentioned before Hispanic have a high regard for personal appearance and spend

more time making a decision. Some of the factors that should be looked at are why Hispanic

customers choose certain products. Latinum Networks stated that Hispanics use makeup to

complete an outfit or look (Latinum Network, n.d.). It is used as a complement to their fashion. A

lot of Non-Hispanics wear makeup to cover flaws instead of wearing it for style (Latinum

Network, n.d). This leads Hispanic customer to purchase makeup that stands out more. This

typically means colorful lipsticks and eyeshadows. M.A.C. cosmetics is known for their

pigmented color because they were created for professional photography and runway. This fact

should be incorporated in M.A.C. Cosmetic’s message to the Hispanic communities.

Products and styles are not the only thing that determines the buying habits of Hispanic

customers. According to Nielson, financial income plays a part it the purchasing behavior of

Hispanic customers (“Hispanic customers…Sales”, 2015). U.S. born Hispanics outspend but

Non-Hispanics and Foreign-born Hispanics in the cosmetics industry (“Hispanic customers…

Sales”, 2015). The high incomes across U.S. born Hispanics is a direct relationship with their

spends habits on cosmetics. U.S. born Hispanics are more settles and accustomed to the culture

rather than Hispanics that just immigrated. Foreign-born Hispanics usually don’t have as much to
spend on cosmetics because on average their income is lower than U.S. Born Hispanics

(“Hispanic customers…Sales”, 2015).

While, money is an important factor when M.A.C. Cosmetics looks at their target

markets, it is not the only factor to consider. According to Latinum Network’s article Six Things

to Know about Latina Beauty Customers, fifty-seven percent of Hispanic customers say they are

on a budget. Although, when asked Hispanic customers are willing to pay more if the quality of

the product is worth it. Hispanic customers are also more likely to correlate that a higher price

means a higher quality than Non-Hispanics (“Hispanic customers…Sales”, 2015).

Quality versus price is not the only thing to know about Hispanic customers when it

comes to cosmetics. Latinum Network gathered more insights into what drives Hispanic

customers in the cosmetics industry (Latinum Network, n.d). The other factors are:

Reasons for Makeup: As stated before Hispanic customers use makeup to complete a

look. They don’t typically use the products to cover flaws. This leads to purchases of products

that contain more color and vibrancy.

Plan and Explore: Hispanic customer are willing to try new products and brands of

cosmetics. However, they do not make purchases in the moment. Hispanic customers take their

time to do research on products before they make a decision to buy.

Cultural Representative: When asked most Hispanic customers said that they preferred to

have a Hispanic represent the brand rather than have Spanish on the packaging. The reason for

this is Hispanics trust the information from a fellow Spanish speaking person over a non-Spanish

speaking person.

Looking at all of the factors of Hispanic customers a few crucial points can be

ascertained from the information. The points are:
 Product
 Quality: The quality of the product surpassed the importance of price.
 Variety: Multiple products give customers new things to try and

experiment new looks with.
 Vibrancy: The products are used to make a statement not fade into the

background of the outfit.
 Information
 Tutorials and testimony: It is important to show the key aspects and how

to use certain products so customers understand what they are and how to

use them. Usually research is conducted before customers make a

purchase.
 Representatives: Hispanic customers are more trusting of Hispanic

spokesperson.

These points are an insight into how Hispanic customers make their choices when they

are purchasing cosmetics. Knowing these points provides a clear picture on how to position the

brand and shape the message the company wants to relate to customers. M.A.C. Cosmetics a few

of the key factors that sway the decisions of Hispanic customers. If M.A.C. creates advertisement

that showcase the important aspects of products that interest Hispanics and include a Hispanic

face they can increase a lot of Hispanic interest in their brand.

Insights Leveraged

The insights found while looking at Hispanic consumers can be applied to other

multicultural segments. According to the Nielson report, the population growth of multicultural

consumers is going to greatly increase by the year 2060 (“The Making…Consumer”, 2015).

These numbers are important because, as a result, the percentage of multicultural consumer in

the cosmetics industry will increase. This increase also leads to the increased purchasing power
that multicultural consumers will have. This makes the multicultural consumers an important

segment of the market.

As the population becomes even more culturally integrated it is important for marketers

and advertisers to create messages specific to those different groups. One insight from looking at

Hispanic customers is they prefer a representative of their same cultural background. The trust

was increased because a recommendation from someone customers are more familiar with is

more believable. This concept can be extended to other multicultural groups. It is easier to take

to word of someone who has the same concerns and questions when it comes to cosmetics. For

instance, a customer is trying to find a foundation to match their skin tone. A person with deeper

skin tones would take advice from someone with a similar skin tone rather than a representative

that doesn’t have the same troubles. The representative show that the brand has shades that are

suitable for what they are looking for in a foundation.

Along with representations a lot of cosmetic customers in general do their research on

products before they purchase them. Products cost a lot of money so often times users want to

see how they and read testimonials of other customers who have bought the product before.

Since the cost is pretty high consumers also want to find products that are good quality so that

they price they are paying is worth it. So, some of the other strategies found while looking at

Hispanic customers could also be applied to other cultural groups.

Evaluation of Effectiveness

If M.A.C. Cosmetics implemented some of these marketing strategies, they will need to

evaluate how they worked. There are a few different ways to collect data to determine the answer
on the effectiveness of the strategies. Some of the options are listed below (LibWeb Library,

n.d.).

Interviews: The interview can be set up us casually or as an interviewer/ interviewee

scenario. The interviewer can ask specific questions or more broad open ended questions for the

interviewee to answer.

Focus groups: A focus group is a small group of people with an instructor. The purpose of

this is to start a dialogue and see how people perceived that marketing strategies and their

experience.

Observation: Observation is when a researcher watches exposure to the marketing

strategies in a natural setting. The researcher takes very descriptive notes on what happened and

the different responses people had.

Case Study: A case study is an in-depth look at people’s responses. They can be about an

individual or a group of people. Typically, it is over a period of time. The aim is get as many

variables as possible in order to gain more information about the event they are researching.

One single evaluation strategy is going to give an accurate answer. There is always the

chance of outliers and inaccurate accounts. A few opinions are not always the opinion of the

whole community. For more accurate results, M.A.C. Cosmetics should a few different types of

research to get a better picture of how effective the strategies were. This research is important

because it will let M.A.C. Cosmetics know what approaches worked and what approaches may

need some tweaking.

Conclusion
M.A.C. Cosmetics has become one of the main makeup companies the in

cosmetics industry. They are known for their quality products and professional representatives.

They have a lot of qualities that are what Hispanic customers are interested in. The projected

population rates for the future shows the Hispanic population with a significant increase. This

increase is going to increase the Hispanic spending power and the Hispanic population in the

market.

The increase in Hispanic consumers is going to lead to an increase in companies trying to

gain their business. M.A.C. Cosmetics should start to advertise and gain Hispanic customers

because they are going to be a major segment in the market. M.A.C. Cosmetics’ motto is, “All

ages. All races. All sexes.” Now M.A.C. has the opportunity to expand their customer base and

continue to represent their company’s values.
Work Cited:

(2015, September 28). Beauty Is In The Eye Of The Beholder: Cosmetics’ Appeal Differs

Between Hispanic Segments. Retrieved November 10, 2016 from Nielsen website:

http://www.nielsen.com/us/en/insights/news/2015/beauty-is-in-the-eye-of-the-beholder-

cosmetics-appeal-differs-between-hispanic-segments.html

Krogstan, J. (2015, February 3). Social media preferences vary by race and ethnicity. Retrieved

November 28, 2016 from Pew Research Center website:

http://www.pewresearch.org/fact-tank/2015/02/03/social-media-preferences-vary-by-

race-and-ethnicity/

Shearer, E. (2016, June 15). Hispanic News Media: Fact Sheet. Retrieved November

30, 2016 from Pew Research Center website:

http://www.journalism.org/2016/06/15/hispanic-media-fact-sheet/

Retrieved November 30, 2016 from MBA Skool website:

http://www.mbaskool.com/brandguide/lifestyle-and-retail/12949-mac-cosmetics.html

(2015, February 23). Hispanic Consumers Are The ‘Foundation’ For Beauty Category Sales.

Retrieved December 3, 2016 from Nielsen website:

http://www.nielsen.com/us/en/insights/news/2015/hispanic-consumers-are-the-

foundation-for-beauty-category-sales.html
Retrieved December 3, 2016 from Latinum Network website:

http://www.latinumnetwork.com/6-things-to-know-about-latina-beauty-consumers/

(2015, March 18). The Making Of A Multicultural Super Consumer. Retrieved December 6, 2016

from Nielsen website: http://www.nielsen.com/us/en/insights/news/2015/the-making-of-

a-multicultural-super-consumer-.html

Methods of Collecting Qualitative Data. Retrieved December 7, 2016 from LibWeb Library

website: http://libweb.surrey.ac.uk/library/skills/Introduction%20to%20Research%20and

%20Managing%20Information%20Leicester/page_54.htm

Our Story. Retrieved November 9, 2016 from M.A.C. Cosmetics website:

http://www.maccosmetics.com/viva-glam-mac-aids-fund

Chesters, A. (2011, October 24). A Brief History Of M.A.C.. Retrieved November 9, 2016 from

The Guardian website: https://www.theguardian.com/fashion/fashion-

blog/2011/oct/24/brief-history-of-mac

Retrieved November 9, 2016 from Revlon website: http://www.revlon.com/

Retrieved November 9, 2016 from Clinique Laboratories website: http://www.clinique.com/

Retrieved November 9, 2016 from Maybelline website:
https://www.maybelline.com/?gclid=CPLek9fB6NACFdgIgQodKp4IKw

Summers, G. (2015, October 5). Latina Makeup Lines. Retrieved November 10, 2016 from

About Style website: http://multiculturalbeauty.about.com/od/Latina/a/Latina-Makeup-

Lines.htm

Aroman, J. (2016, May 30). Selena Quintanilla Represents The Future Of Hispanic Marketing &

What Brands Can Learn From M.A.C. Cosmetics. Retrieved November 10, 2016 from

website: https://avoicefortheinvisiblegiant.wordpress.com/2016/05/30/selena-quintanilla-

represents-the-future-of-hispanic-marketing-what-brands-can-learn-from-m-a-c-

cosmetics/

MAC Cosmetics SWOT Analysis, USP & Competitor. Retrieved November 9, 2016 from

website: http://www.mbaskool.com/brandguide/lifestyle-and-retail/12949-mac-

cosmetics.html