2000 word marketing strategic plan, needed in 24 hours

Strategic Marketing

MKT2009

Semester 2

MAC Cosmetics Marketing Plan

Word Count: 2,219

Abstract

MAC, one of the world’s leading cosmetics companies, target millennial women who are digital savvy and willing to pay for high quality makeup. MAC have strengths such as a strong brand and celebrity advocates. However, they have the opportunity to appeal to a new audience – women 50 years and over. This segment are currently, to an extent, neglected in the cosmetics market. MAC have the opportunity to make sales from this demographic as the cosmetics market is currently being diluted by new entrants mainly appealing to millennial women. In order to exploit this opportunity MAC are advised to launch a new product range that appeals mainly to older generations of women. This launch, named MAC Classics, should be sold online and instore, with an intention to focus on selling instore due to staff being able to build relationships with consumers. The launch will be advertised using billboards and magazine pages. Ideally the campaign should include an appropriate role model such as Jane Seymour to encourage the target segment to aspire to be like her through the use of MAC products. The success of the launch will be measured through sales and the demographics of those who make purchases.

Contents

1.0 Where are we?

1.1 Segmentation

1.2 Competitor Analysis

1.3 Market Overview

1.4 SWOT

2.0 What’s next?

2.1 Objectives

2.2 Target segment

2.3 Tactics

3.0 Did we get there?

9.0 References

1.0 Where are we?

Founded in 1984, MAC cosmetics has become one of the world’s leading cosmetics brands. In 1995, the Estee Lauder Companies purchased a percentage of MAC and acquired the remaining shares later in 1998. After the purchase was complete John Dempsey was named as the president of MAC. (MAC History). Estee Lauder own over 30 brands in the cosmetic industry alongside MAC including fellow premium brands like Smashbox, Bobbi Brown and Clinique (Our Brands, 2016). Prestige cosmetics have been growing at twice the rate of the mass market with MAC being named as one of the strongest performers (Mintel, Key Players, 2016). This success has been put down to improved distribution in the UK and new product developments (Mintel, Colour Cosmetics, 2016). MAC’s number of employees continue to grow as they increase their store locations with the latest opening being in The Bridges, a shopping centre in Sunderland (Sunderland Echo, 2017).

1.1 Segmentation

MACs ethos is ‘All ages, all races, all sexes’ which focuses on the inclusion of a wide range of people. Despite this, millennial women are the target market. The majority of MACs instore employees, celebrity collaborators and models are female and therefore provide a figure for customers to relate to. The marketing mix demonstrates that MAC are a prestige brand with pricing that is costly to the average consumer, therefore, behavioural characteristics of MACs target audience is the ability to spend more on cosmetics. Psychological segmentation characteristics include lifestyle and attitudes. MAC’s target audience are digital savvy millennials that are typically engaged in social media regularly and are knowledgeable on trends and popular brands. MAC typically make cutting edge campaigns and products which demonstrate the focus on younger audiences. MAC are easily accessible globally, both in store and online and do not target customers in specific locations (Baines and Fill, 2014).

1.2 Competitor Analysis

MAC’s rival Benefit have been noted as different to others in the market, due to their dedication to fun products. 32% of users report an excellent experience from the brand (Colour cosmetics 2016). MAC differ to benefit in terms of packaging and branding, Benefit’s fun comical packaging contrasts from MAC who strive for sleek professional expensive aesthetics. Urban Decay are the most similar competitor to MAC and therefore the closest competition as they are both ‘high-end’ in their branding and packaging. Urban Decay have recently extended their range to have more foundation and concealer options, however MACs overall range and choice in shades is broader than Urban Decay. If Urban Decay continue to expand their product range they may threaten MAC by introducing options that only MAC currently carry.

Colourpop have a very limited range of products however their lips products have taken the cosmetics industry by storm due to their high quality and low price. Products from Colourpop may be seen as more value for money however MACs luxury brand may be enough to outweigh the value for money aspect from Colourpop. Younger generations are willing to spend more money on cosmetics and are therefore in a position to be able to afford MACs products rather than search for alternatives. Although Colourpop pose a threat to MAC, they are only in a position to threaten MACs lip products which is a relatively small section of their products.

Most of MACs competitors are cruelty-free, including Urban Decay and Colourpop. These cruelty free competitors do not operate in the Chinese market due to animal testing laws therefore MAC dominate the Chinese market due to lack of competition from Western brands. However, in Western cultures MAC are at a disadvantage as many people prefer to make ethical purchases. Despite MACs extensive high quality range, those who feel strongly about animal ethics, are likely to replace MAC for the sake of their beliefs. In the UK 53% of people stated that cosmetic products being vegan or being from a cruelty free brand is becoming increasingly important (Mintel Colour Cosmetics, 2016)

Figure 1: Table of MAC cosmetics main competitors

1.3 Market Overview

MAC have a long-running scheme called ‘Back to MAC’ where customers are eligible to receive a free lipstick for the return of empty packaging. The returned packaging is recycled therefore benefitting the environment, this type of scheme is not present in MACs competitors. Additionally, to providing a sense of social responsibility, the scheme also encourages repeat purchases with the incentive of receiving a free product on the return of six empty containers.

Technological advances have increased the channels cosmetics companies sell and engage with consumers. MAC, and their main competitors gain many sales through their websites that provide international shipping. With advances in social media, MAC has the opportunity to engage and advertise, inexpensively, with a huge number of consumers. MAC boast 14.8 million Instagram followers in comparison to only 6.4m and 4.3m from rivals Benefit and Colourpop. MAC must continue to grow their following and stay ahead of their competition by grabbing the attention of a wider audience. By having more than double the number of followers than their closest competitor they can spread messages and awareness much further, putting them at an advantage.

Figure 2: PESTLE Analysis for MAC Cosmetics

1.4 SWOT

MACs key strength is that they are a well-known established brand. They are one of the most prevalent brands in department stores making them visible to a massive audience. Many famous-faces have worked with the brand directing attention and aiding them to become a household name. Influential figure Kylie Jenner has previously recommended MACs lip pencil Soar and lipstick Velvet Teddy which resulted in a colossal popularity boost to become best-sellers. This puts MAC in a powerful position as more awareness provides the potential for sales.

A weakness of MAC is that it has faced negativity for staff being rude and unapproachable at times. Customers have to approach staff to make a purchase and therefore negative experiences with staff can impact sales. Retraining of staff and feedback opportunities can improve this relatively easily.

Porter (1998), states threat of new entrants is high when the industry is profitable, these new entrants dilute profits for existing firms. In the cosmetics industry threat of new entrants are high with companies like Colourpop taking the industry by storm despite being only two years old, this is a major threat to MACs sales.

Figure 3: Table of MAC cosmetics SWOT analysis

2.0 What’s next?