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My senior level marketing class was asked to present a case on MAC Cosmetics

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  1. 1. Megan Guenther, Briana Irwin, Natalie Laneri, Ashley Fitterer, Kaitlyn Tymas, and Megan Fannin
  2. 2. Company <ul><li>Make-Up Art Cosmetics Ltd.-Founded 1985 in Toronto, Canada </li></ul><ul><li>Originally for professional make-up artists </li></ul><ul><li>Vision: To be the most preferred brand of professional make-up artists </li></ul><ul><li>Fashion models, actors and stage performers were the first consumers of the products before the public’s interest developed </li></ul><ul><li>Unique image: black clothing, extreme employee style, black counters, professional make-up artists </li></ul><ul><li>Touch-and-play experience </li></ul><ul><li>Certain people turned off- artists added to the brand’s credibility and differentiation </li></ul><ul><li>Distribtion in Canada and U.S. </li></ul><ul><li>- New York and Los Angeles </li></ul><ul><li>ProShops </li></ul>
  3. 3. Retail Channels <ul><li>Products available in over 200 locations in 15 countries, with 2,500 employees </li></ul><ul><li>Partnered Stores: Nordstroms, Bloomingdale’s and The Bay </li></ul><ul><li>Company Owned and Operated Stores </li></ul><ul><li>1-800 customer service call center </li></ul>
  4. 4. Target Consumer <ul><li>Professional Make-Up Artists- included models and actors, 50% of overall sales </li></ul><ul><li>2. Retail Consumer- younger women </li></ul><ul><li>Typical M.A.C. consumer is a young, fashion-conscious individual who is seeking a unique look </li></ul>
  5. 5. Products <ul><li>Large selection of colors and textures </li></ul><ul><li>Withstand bright lights </li></ul><ul><li>Worn for long periods </li></ul><ul><li>Professional quality brushes </li></ul><ul><li>M.A.C.-PRO (exclusive)- cream colors, primary colors, mixable lip-creams and professional tools </li></ul>
  6. 6. Company: Pricing & Promotion <ul><li>Competitive Pricing, between mass-market and competitors –ex) lipstick $4-$20 , M.A.C. $12 </li></ul><ul><li>Preferred Professional Industry Discount (PPID) </li></ul><ul><li>No advertising, no discounts </li></ul><ul><li>- Social conscious programs to help raise awareness for the environment and AIDS </li></ul><ul><li>Back to M·A·C Program </li></ul><ul><li>Return 6 M·A·C primary packaging containers to a M·A·C counter or M·A·C Cosmetics Online, you receive a free M·A·C Lipstick of your choice as our thanks to you. </li></ul>
  7. 7. VIVA GLAM Celebrity Spokespeople The M·A·C AIDS Fund is proud to be associated with a spectacular lineup of multi-talented artists for the launch of the VIVA GLAM VI lipstick and lipglass. These committed superstars will serve as powerful emissaries for the M·A·C AIDS FUND – dedicating their time, energy and talent on behalf of the AIDS cause . <ul><li>1994, M.A.C. AIDS Fund supports men, women and children affected by HIV/AIDS globally </li></ul><ul><li>Same year, introduced first VIVA GLAM lipstick </li></ul><ul><li>Every cent of selling price of VIVA GLAM lipsticks go to the M.A.C. AIDS Fund </li></ul><ul><li>Approximately $100 million proceeds have been collected </li></ul>
  8. 9. Core Industry <ul><li>Cosmetic Industry </li></ul><ul><li>- Entered Industry with a different approach </li></ul><ul><li>-Focusing more on developing professional quality products </li></ul><ul><li>-Socially responsible and unconventional </li></ul><ul><li>-”Edgy”, “Hip”, and “In” </li></ul>
  9. 10. Competition <ul><li>Lancome, Estee Lauder, Clinique, Elizabeth Arden, and Shiseido </li></ul><ul><li>Bobbi Brown Essentials, Trish MacEvoy, Nars, Stila, and Make-up Forever </li></ul>
  10. 11. Competition (Cont.) <ul><li>Visiora, Bill Tuddle, Kryolan, RCMA, and Joe Bolasco </li></ul><ul><li>Nordstrom, Macy’s and Bloomingdale’s </li></ul>
  11. 12. Define Opportunities With the undeniable success of M.A.C since its founding, the company wants to maintain its status as a leader in the market. The company is currently facing a turning point in which it needs to decide on how to focus its attention on all of its consumers: professional artists, professional industry and retail consumers. How are they going to keep their unique and individual style that they have used to their advantage, while satisfying all customers?
  12. 13. SWOT Analysis <ul><li>Unique image (known for colored products) </li></ul><ul><li>High quality </li></ul><ul><li>Word of mouth endorsements by professional make-up artists </li></ul><ul><li>Numerous awareness campaigns (positive community engagement) </li></ul><ul><li>Price </li></ul>trengths
  13. 14. <ul><li>Lack of on-line sales </li></ul><ul><li>Brand intimidation </li></ul><ul><li>No in-store gift with purchase promo </li></ul>eaknesses
  14. 15. <ul><li>Informational website </li></ul><ul><li>Selling through retailer website </li></ul><ul><li>Taking advantage of selling online </li></ul>pportunities
  15. 16. <ul><li>Competition already online </li></ul><ul><li>Retailers sell other product lines </li></ul>hreats
  16. 17. Online Retailing <ul><li>With the turn of the century comes an intense look to the Internet and how to best utilize the resources available on it. </li></ul><ul><li>More and more retailers are looking to expand their business to incorporate internet sales to increase profits. </li></ul><ul><li>With rates expected to exceed 200% per year for the </li></ul><ul><li>next few years, it’s imperative that M.A.C takes advantage of the opportunity in front of them as best they can. </li></ul>
  17. 18. Online Retailing <ul><li>The internet has made it possible for retailers to bridge the gap between richness and reach. </li></ul><ul><li>Rich communication used to only be found face-to-face, while in order to reach the customer, retailers would sometimes have to sacrifice richness. </li></ul><ul><li>The internet broke down this fundamental trade-off, making is possible to reach the customer with a rich shopping experience. </li></ul>
  18. 19. Define the Opportunity <ul><li>Monetti identified 3 distinct internet options that he felt were suitable for building an online presence </li></ul><ul><ul><li>Information oriented website </li></ul></ul><ul><ul><li>Online selling through retail partners’ websites </li></ul></ul><ul><ul><li>Online direct selling through a M.A.C. website </li></ul></ul>
  19. 20. Option 1: Information-Oriented Website <ul><li>Would allow customers to move an online camera around the page and to zoom in on specific products or news </li></ul><ul><li>Designed to have “fashion at the forefront” image in mind </li></ul><ul><li>Increase market awareness of M.A.C. and its products worldwide, allowing them to expand into new markets around the world </li></ul><ul><li>Site would include addresses of nearby retailers who sold M.A.C. products, thereby driving sales to those stores </li></ul><ul><li>Could be used at promotion for AIDS, a cause that the company long supported </li></ul><ul><li>Gave the company a way to introduce new and upcoming products </li></ul><ul><li>M.A.C. Internet Club </li></ul>
  20. 21. Option 2: Online Selling Through Retail Partners’ Web Sites <ul><li>Encourage existing retail partners to sell M.A.C. products on their own websites </li></ul><ul><li>Would create fewer logistics problems for M.A.C. </li></ul><ul><li>On the other hand, retail partners were unlikely to make major investments in building the M.A.C. brand since they would be showing thousands of other products online </li></ul><ul><li>M.A.C would also have limited input into how its products would be presented on the sites </li></ul><ul><li>Problem: there would be limited potential for new customers since the retailers websites were likely to appeal to their already existing customers </li></ul>
  21. 22. Option 3: Online Direct Selling Through a M.A.C. Web Site <ul><li>Site can range from Basic to Innovative </li></ul><ul><li>Basic: </li></ul><ul><li>Allows customers to purchase products </li></ul><ul><li>Choose from itemized lists with brief descriptions and product photographs </li></ul><ul><li>Information about how selected </li></ul><ul><li>product should be applied </li></ul><ul><li>Innovative: </li></ul><ul><li>Buy at Store </li></ul><ul><li>Refill on-line </li></ul>
  22. 23. <ul><li>• Likely to attract new customers to M.A.C. Stores </li></ul><ul><li>Quicker & easier to introduce and test new products </li></ul><ul><li>Ability to broaden product line beyond what could effectively be displayed at stores </li></ul><ul><li>Removes excess repeat traffic from M.A.C. store counters, easing lineups and crowding </li></ul><ul><li>Customer Profiling </li></ul><ul><li>Cross Promote for in-store locations </li></ul><ul><li>Increase awareness of Social Campaigns </li></ul>Benefits
  23. 24. <ul><li>Could pose a threat to the company’s credibility with the professional segment of the market </li></ul><ul><li>Large initial investment: </li></ul><ul><li>-Operating Expenses </li></ul><ul><li>-Warehousing & Shipping/distribution </li></ul><ul><li>-Cost associated with building the website </li></ul>Disadvantages
  24. 25. 6 Barriers to Online Success <ul><li>Increasing consumers’ comfort levels </li></ul><ul><li>Resolving technological limitations </li></ul><ul><li>Rapidly scaling internal operations </li></ul><ul><li>Engineering comprehensive convenience </li></ul><ul><li>Resolving channel conflict </li></ul><ul><li>Developing low-cost distribution </li></ul>
  25. 26. Decision Online Selling through M.A.C. website
  26. 27. Variables For Decision <ul><li>Online retailing reached approximately $15 billion in revenues, far exceeding projections </li></ul><ul><li>Attract more customers to the M.A.C. stores </li></ul><ul><li>For every dollar spent online, consumers were likely to purchase another $5 of goods in stores </li></ul>
  27. 28. Variables for decision (cont) <ul><li>Could introduce their new products more quickly </li></ul><ul><li>Gives the opportunity to offer more products </li></ul><ul><li>The M.A.C. shopping experience analysis showed that M.A.C selling online had the highest total </li></ul>
  28. 29. Variables (cont) <ul><li>Many customers including the make-up artists already know what they need to buy and they just need to refill old make-up </li></ul>
  29. 30. Recommendations <ul><li>Create Link on website tailored to make-up artists </li></ul><ul><li>Offer event listings, job opportunity’s, specialty products, advice with handling clients </li></ul><ul><li>Also offer special prices for artists </li></ul>
  30. 31. Recommendations (cont) <ul><li>Cater to professional users by showing whats new and fashionable </li></ul><ul><li>“ how to” section, different colors that go good together and how to apply the correct way </li></ul><ul><li>Advertise there campaigns such as their Aids awareness charity </li></ul>
  31. 32. Like this look? Try it on at a store near you: 1. Print this page. 2. Locate a M·A·C Counter location near you. Find Stores. 3. Call to schedule an appointment. EYES Lightly fill in brows with a mixture of Cork and Espresso Eye Shadows. Apply Constructivist Paint Pot all over eyelid and blend well as a base. Highlight the browbone area with Mylar Eye Shadow using 224 Brush. With a fluffy brush, such as 217 Brush, apply Bamboo Eye Shadow all over the lid. Then blend Saddle Eye Shadow into the crease with 219 Brush and run it lightly along the lower lashline. Line the top and bottom lashline with Stubborn Brown Powerpoint Eye Pencil. For the upper lashline, create a thicker line towards the out edges of the lashline, winging slightly upwards for a dramatic eye opening effect. Curl Lashes and apply two layers of Plushblack Plush Lash. CHEEKS Dust cheeks lightly with a sheer veil of Well Dressed Powder Blush. LIPS Line lips with Subculture Lip Pencil. Smooth Viva Glam VI Lipstick over lips and top off with the newest addition to the Viva Glam collection - Viva Glam VI Special Edition Tinted Lipglass.