Mac Presentation 2 Strategic Brand Managment Project

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This project for our strategic brand management module demonstrated a plan to significantly enhance brand performance for MAC cosmetics. The presentation received the highest mark for Leslie DeChernatony's strategic brand management module in 2009.

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Mac Presentation 2 Strategic Brand Managment Project

  1. 1. Boosting Brand Performance Presentation by Chatsuree Jarujet Dimpi Doshi Jennifer Bonhomme Kushan Banerjee Ying Ying Chiang Date 2nd Mar. 2009
  2. 2. Agenda 1. Establish Current Situation 2. From Brand Vision to Brand Evaluation -Brand Vision -Organizational Culture -Brand Objective -Auditing Brandsphere -Brand Essence 3. Big Ideas & Recommendations
  3. 3. The Numbers Revisited Sales of Estee Lauder’s make up brands fell 12% in 2008. Estee Lauder plans to cut 2,000 jobs or 6% of its workforce over the next 2 years. M.A.C’s parent company announced a 4 year cost-cutting strategy to reduce costs by up to $550 million. Source: WSJ, 2009
  4. 4. Brand Vision Organizational Culture Brand Objectives Brand Audit Brandsphere Evaluation Brand essence Internal implementation Brand Resources Source: Chernatony, 2008
  5. 5. Brand Vision Envisioned future A time when creativity and beauty rule for all ages, all races, all sexes. Purpose To create confidence and celebrate individuality through the MAC look Values Playful irreverence, cool confidence, socially-aware
  6. 6. M.A.C Brand Culture Artefacts Eye-catching, chic, stylish High profile backstage make up studio CulturalValues Elite equality Assumptions Fashion-lover
  7. 7. M.A.C Objectives • Long term Consistently deliver trusted creativity • Short term Staying ahead of fashion and trends
  8. 8. M.A.C Brandsphere -Strong distribution -Strong brand name 1 network 1 -R&D focus 1 -Customer concentration 1 -WOM 1 -Counterfeit 0 -Not as loyal in -Increase regulations 0 recession 0 -lower customer -Intense, high switching 0 -Trusted make up spending 0 experience 1 -Value brands out performing premium 0 Source: Chernatony, 2008
  9. 9. M.A.C Brand Essence Individual Trend-setting Outrageous Suitability In-the-know Status Special Confident Bold Personalized Standing out Exclusive beauty Custom Trusted expertise Colourful
  10. 10. Why M.A.C ? New markets Global recession Convenient Word-of-mouth Good for travel Same quality Lower price point Strong R & D
  11. 11. New Markets for M.A.C Switchers from Youth Market Premium Value Savers
  12. 12. Balancing the investment vs. gains from different customers Cost to serve customers L Best Build revenue o customers w H Lower your Worst i costs customers g h Low High Revenue Source: Piercy, 2000
  13. 13. Brand opportunities in a money & time constrained society Personal Disposable Income H Justify price i Charge for premium g convenience h L Facilitate Stress key benefit o functional DIY and VFM w Limited Plentiful Time availability Source: Chernatony, 2008
  14. 14. Impact on Performance •Increase sales volume • Increase revenue streams •Decrease the feeling of vulnerability in a recession • Addresslower customer spending and frequency • Acknowledge emotional needs, showscaring for customers
  15. 15. Why Create ? Brand co-creation Brand experience MAC is for everyone Customer’s creativity Empowerment of consumer Customer’s own positioning ofattributes Lower overhead cost online Increase online presence
  16. 16. Create your own Impact on Performance • Encourage the consumer to become co-creator of the brand and product. • Enhance intimacy with the brand • Boost customer spending on M.A.C. products, which will lead to higher sales revenue • Pre-empt M.A.C customer to switch to competitors brands •Re-define premium status cosmetics for those willing to spend, balancing the value of M.A.C mini
  17. 17. Budget M.A.C will allocate 5%of its 2008 sales to and Advertising & Web design & communication R &D expense management expense Return of a 10 to 15% increase on performance
  18. 18. Additional Recommendations Expand B.R.I.C. markets (Brazil, Russia, India, China markets) Audit store performance & close low performing stores Stratigically manage the termination of relationships Conduct workshops -to strengthen the brand purpose
  19. 19. Conclusion M.A.C’s parent company, Estee Lauder, has experienced declining sales and profitability due to the global recession. By launching and Create , customers will benefit from more affordable products while M.A.C remains an elite, premium brand. This will improve performance in sales volume while staying in line with the brand values and purpose.
  20. 20. References Byron, E. (2009) “Estee Lauder Profit Declines 30%” Wall Street Journal. [Online] Feb 6 p.B3 Estee Lauder, 2008. Annual Report 2008. [Online] de Chernatony, L. (2006), From Brand Vision to brand Evaluation, Oxford: Elsevier Ross, E. & Holland, A. (2007) “M.A.C Cosmetics - Two Franks are Better than One” The Cool Hunter. [Online] Apr 24 Sacks, D. (2007) “MAC Cosmetics” Fast Company. [Online] Dec 19 Wharton Business School, (2008) “MAC AIDS Fund’s Nancy Mahon: Tying the Cause to the Brand” Knowledge@Wharton. [Online] Oct 15 Wipperfurth, A. (2005) Brand Hijack: Marketing Without Marketing. Penguin, New York. p.101-108
  21. 21. Any questions?

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