In the first assignment I have introduced about the MAC Company so I’m going to move on and complete these tasks below.

Task 2.1 Show macro and micro environment factors which influence marketing decisions

MICRO ENVIROMENTAL FACTORS

The micro environment includes the factors affect the ability to serve the company’s customers- the company, suppliers, marketing intermediaries, customer markets , competitors ,and publics.

(Kotler, 2012)

Company: Marketers have to work in agreement with other company sections to build customer value and relationships.

Since 1994, MAC has been a part of the Estée Lauder Companies and it has been sold in over 105 countries up to now. It commits to developing new categories,

products and more than 50 collections every year, which to serve the demand of consumers and professional makeup artists.

The Estée Lauder Companies financial report in 2015 : “LIPSTICK SALES SOARED! This year as consumers by the millions sought a quick and easy way to experiment with color trends. Consumers all over the world indulged in pick-me-up moments in makeup, with lipstick representing the power of self-discovery and self-expression.”

Suppliers: Suppliers play an important role in the company’s network, providing the sources the company must have to produce goods and services.

MAC has the Supplier Regulations which are based on United Nations Universal Declaration of Human Rights and the California Transparency in Supply Chains Act of 2010 and committed to upholding the principles.

No need to say MAC depends very much on suppliers which are important business partners.

Marketing intermediaries: The link that helps to promote, sell and distribute the company’s goods to final buyers through contractual arrangements or purchase and resale of the product.

MAC is a multi-channel and its products are sold at shopping malls, online websites, retailer stores under the management of MAC or resellers at more than 105 countries all around the world.

Competitors : If a company wanted to gain the success, it had to offer greater customer value and satisfaction than its competitors do . To understand the competitor is the significance for businesses, especially when the competitors select the nature of emulation or the extent of tricks to achieve advantages in the industry.In a survey which was made on a forum called http://www.specktra.net/ , almost the answer for “Who are MAC’s biggest competitors?” were Nars and Smashbox.

Despite the fact that there are thousand brands of make up on Earth which MAC cosmetics are dealing with, MAC is the one and only which provides a huge selection of lipstick colors with the “no doubt” quality and moderate price, that is why MAC lipsticks are the most-hunted sticks for girls in general.

Public : Some group in the marketing environment can both directly or indirectly impact on an organization’s ability to accomplish its goals.

There are 7 types of publics consists of Financial publics, Media publics, Government publics, Citizen-action publics, Local publics, General publics and Internal publics.

General publics are definitely the one that MAC company aims at.MAC builds the affective public’s image that features the iconic personalities in conversation about life, art and creativity. She is no one else but Caitlyn Jenner_ the beautiful screen goddess!

Customers : In the microenvironment, the most important factors are customers. To serve target customers and build strong relationships with them is the aim of the entire system.

MAC has many customers such as retailers, wholesalers, final buyers… MAC is not a selective brand because it is easily reached for each human ( I don’t mention about the price) , over 200 lipstick colors are too multiform but MAC is keeping on developing new products every year to satisfy more.

MAC targets international market which consists of the buyers from in other countries, including consumers, producers, resellers, …

MACROEVIRONMENTAL FACTORS

The bigger societal factors are demographic, economic, natural, technological, political and cultural forces.

(Kotler,2012)

Demographic : The study of human population based on factors such as size, density ,age, gender ,race, occupation, education….

With the purpose to serve literally everybody, the mission “All Races, All Sexes, All Ages” is set to please the consumers. Being the world leading make-up corporation among both professional make-up artists and consumers, to meet customers demand for superior quality services and to provide secure & challenging work condition for all employees, it commits to

high standards and creative development with a boldness concept.

Economic : Including economic factors which affect consumer purchasing power and spending patterns. The change which Estee Lauder has given for MAC’s demand after its change in the economic structure will be shown by the diagram below.

Since 2008, the global sales rate for MAC has increased twofold, even if they are encountering economic difficult, they still maintain the multi channel and multi branding strategy that retail establishment and their online shops overseas.

Natural : The natural resources that are needed as inputs by marketers or that are affected by marketing activities.

Natural environment plays an essential part for its needed resources for the production of cosmetics.

MAC is not a veggie company, it still has a number of cosmetics that are vegan. MAC not only supports the environment but also offers a recycling program named Back 2 MAC, and has a great humanitarian determination in the fight against HIV/AIDs.

For many women, it is significant to use this kind of cosmetics that MAC provides to make them feel as they are doing their part to save the environment and stay true to their beliefs without sacrificing the high-quality makeup they adore.

Technological : Forces that create new technologies, producing innovative product and market opportunities. It not only changes very fast and creates high competition in technological sector (new & cheaper ways of production). MAC uses technology such as the Internet to market its products efficiently and has generated profits for the company. (maccosmetics.com)

Political : Including laws, government agencies, and pressure groups that impact and limit various organizations and individuals in a given society.

There are laws which forbid certain ingredients in cosmetics such as silicons, parabine or dimethicone that MAC has to obey the rule, especially when it comes to animal testing.

FDA sets cosmetic security under the right of the Federal Food, Drug, and Cosmetic Act (FD&C Act) compels that cosmetics marketed in interstate commerce be safe when used as directed in the labeling or under customary conditions of procedure. 

Cultural :Affects strongly on how people think and the way they consume, as a result MAC uses popular culture to promote sales, for example in 2014,numerous of

celebrity collaborations ranges have been released by MAC. Rihanna, Lorde are minority in these collaborations.

Task 2.2 Propose segmentation criteria to be used for products in different markets

(Kotler,2012)

Demographic segmentation separates the market into different units based on differences in demographic factors of groups of consumers.

MAC ‘s demographic is very simple, it doesn’t base on any particular segmentation, it’s for women and men. It targets professional make-up artists but in the other hand, its products are sold publicly so everyone can buy them.

The primary target “ All ages, all races, all sexes”

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Second target : female from 18-25 years old, upper middle class female and those people who want to individualize themselves but also enjoy following trends and the demand for eye-catching look.

Besides, MAC doesn’t provide cheap products like drugstore brands such as Maybelline, Cover girl, L’Oreal Paris,… but they do minimize the size of the product to make it becomes affordable for teenagers or people with low income.

Psychographic Segmentation separates buyers into different units based on social class, lifestyle, or personality characteristics.

Psychographics of MAC includes fashion forward, seeking for individual or unique look, outgoing, confident and beauty addicts. These customers are creative, innovative and spontaneous.

Geographic Segmentation separates a market on the basis of geography.

MAC conducts its marketing strategy in accordance with the location and the trend of those locations. In South and West Africa, MAC adjusts the stock in relation to the skin pigmentation of citizens from these continents.  On the other hand, MAC make use of Hello Kitty and many cartoon characters for packaging, as a result of

Chinese are huge fans of cartoon characters. MAC markets to Brazil and India by using strong pigmented colors and lots of different cosmetics that improves the

facial features.

Behavioral Segmentation separates consumers based on the way the population respond to, use or know about the product.

People who love spending money on fashion, entertainments and socializing are devided into this segment of MAC.I propose MAC Company ought to apply the Behavioral segmentation as most of its customers are keen on shopping because of

their benefit (beautifying), the concern of the appearance, the wish to follow lastest trends and styles that are brought by professional brand of cosmetics , moreover they like spending on what show off their value or peerage which MAC obviously is able to satisfy themselves.

Task 2.3 Choose a target strategy for a selected product/service

Undifferentiated Marketing(Mass marketing)

A strategy might decide to take no notice of market segment differences and target the whole market with one offer.

Differentiated Marketing(Segmented)

A strategy decides to target market approach and design marketing techniques that appeal to specific groups of people.

Concentrated (niche) marketing

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

MicromarketingFocus on the needs and wants of specific customers, including local marketing and

individual marketing.

Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups.

Individual marketing (also known as one-to-one marketing, customized marketing, and markets-of-one marketing) is to meet the demand of individual customers.

MAC markets its goods and services to both individual and organizations. In the early development of the company, MAC ‘s products were made purposely for professional make-up artists for better photo shoots in their studios, but now MAC mainly target to 18-35 years old woman and all ethnicities.

UNDIFFERENTIATED MARKETING.

Such a strategy that concentrate on what people need, want and desire for rather than the difference, not only it is efficient economies of scale but also appeals to a broad spectrum of consumers. The market that MAC targets is mainly women (80% of consumers) who are interested in ethical and environmentally friendly products as well as willing to pay more for beautify their appearance.

Task 2.4 Demonstrate how buyer behavior affects marketing activities in different buying situations.

Model of consumer behavior

The environment includes marketing stimuli and others such as economic, technological, social, cultural.

Marketing stimuli:-Product : Lipstick-Price : $18,00 -> $33.50-Place: MAC has its stores in more than 105 countries all over the world. The lipsticks are usually sold at department stores, shopping malls, on online websites and cosmetic shops.-Promotion: MAC distributes the products to top designers who work with top models or actresses. (word of mouth advertising) .MAC also launches new limited collections every year, promotes products by using placement marketing strategy and raises money for charity for HIV/AIDS.MAC uses personal selling and stands out as the world’s largest make-up company.

The buyer’s black boxBecause of the difficulty to figure out what is on the customer’s mind,MAC should take a second look at potential consumers and their purchasing behavior. I’m saying this because I am one of those who haven’t been affordable for a MAC lipstick yet. The basic needs of non-customers that MAC’s products and services do not satisfy would perhaps the price. Many drugstore brands such as Maybelline, Cover Girl, Wet n Wild, E.L.F, NYX… are alternative choices for consumers like me. Moreover, MAC advertises its products in a unique way by favoring the art side by adding words like “studio” or “glamorous” into their product’s name, which takes the meaning of beauty and mix it with art. In my opinion, MAC ought to approach softly to mark an image in the everyday consumer rather than bringing about the feeling of pressure. The mission of cosmetics is to boost consumer’s self-esteem and highlight their appearance to make them feel more attractive. (I only target the consumers who are not affordable but love to have MAC products, I do not mention about any characteristic or attitude)

Buyer’s responses include buying attitudes and preferences; purchase behaviors: what the buyer buys, when, where and how much; brand and company relationship behavior.

Characteristic affecting consumer behavior

Cultural Factors

Cultural factors are the established beliefs, values, traditions of a nation or society, including culture, subculture and social class.

-Culture consists of basic values, perceptions, wants, and behaviors learned by a member of society which are vital.

-Subculture is a group of people sharing different beliefs and behaviors from the main groups like a culture or society.

-Social class : a broad group of people in the society having common values, interests, and behaviors.

For example, http://www.maccosmetics.com/culture/global-heroes is the link to MAC ‘s culture. MAC chooses a popular individual each term and analyses each

person’s culture, shines the spotlight on regionally celebrated stars who are making global impact to attract consumers from the same culture such as Chinese( Asian in general), colored people …

LAURA MVULA- UK SINGER

Who is shaking up UK pop chart

SHAWAY YEH represents one of the most influential media and opinion leaders on fashion in the Greater China region.

Social FactorsReference group, family, and social roles and status are factors that impact on behaviors of a customer.

-Reference group is a group of more than 2 people to interrelate and achieve one or mutual goal.

-Family members may strongly and straightly manipulate buyer behavior that has been researched comprehensively.

-Roles and status : a person whose position in many groups can be defined as both role and status. A role includes the expected activities to perform along with surrounding people. Every role carries a status that reflects the general esteem given to it by the society.

MAC has created a forum called Member Voice to let its consumers to speak up, to give comments and ideas to improve MAC’s products. Consumer can see this forum as a reference group to search for information or revision.

Personal Factors

A buyer’s decisions also are influenced by personal characteristic such as the buyer’s age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept.

-Age and life-cycle stage: People do not keep paying for the same goods and services over their lifetime. Life-stage changes are consequences of demographics and life-changing events.

-Occupation: The bought goods and services are affected by a person’s occupation. Marketers should identify the occupational groups which have an above average interest in their products and services.

-Economic circumstances : A person’s circumstance affects the choices according to trends in consumer’s economy.

-Lifestyle: standards of living expressed in the psychographics which involves AIO measurement(activity, interest, opinion) -Personality: the unique psychological characteristic which distinguishes a person or group.

Psychological Factors

A person’s buying choices are further influences by 4 psychological factors: motivation, perception, learning, beliefs and attitudes.

-Motivation (drive) : A pressure to seek pleasure of the need.

-Perception: The process of recognizing.

-Learning: The process of gaining knowledge or skill through experiences.

-Beliefs and attitudes:

. A belief is a descriptive thought that a person has about something.

. Attitude describes points of view, feelings, thoughts …

Buyer’s decision process

Need recognition is the stage the buyer recognizes a problem or need.

Information search is the stage of the buyer searches for more information, the consumer may pay a lot of attention or may search actively.

Evaluation of alternatives : the stage to evaluate alternative brands from the searched information.

Purchase decision : the buyer decides which brand to pay for.Post purchase behavior: the stage that consumers take further action based on their satisfaction or dissatisfaction after purchasing.

For example, in purchasing a MAC lipstick, a consumer uses five-stage decision making progress.

1/ Need recognition: the consumer must be trigged by a MAC lipstick through their personal usage, recommendation of others, advertisement or packaging.

2/Information search: the consumer searches for MAC cosmetics either by using Internet, seeking information from a product user or go directly to the store and ask about the product.

3/ Evaluation of alternatives: MAC narrows alternatives and make it the ultimate choice for consumer.

4/ Purchase decision: the consumer decides to pay for MAC cosmetics.

5/ Post purchase decision: the consumer’s post purchase behavior shows their satisfaction with their purchase for MAC product

Task 2.5 Propose a new positioning for a selected product/service

Product differentiationService differentiationChannel differentiationPeople differentiationImage differentiation

(Kotler,2012)

Product differentiation

Service differentiation

Channel differentiation

People differentiation

Image differentiation

A marketing process that showcases the differences between products such as features, performance, or style and design.

A marketing progress that showcases the differences between services that accompany the product.

A firm to distinguish itself from its competitors through distribution channels.

Employing and educating better persons than their competitors do.

The identity should be well differentiated from the image, aim to identify itself to its customers and gain the perception in the mind of consumers.

MAC uses the product differentiation (over 200 lipstick colors that other brands haven’t provided yet); the channel differentiation (MAC products are exclusively sold at MAC independent stores); the people differentiation (each store is run by professional make-up artists).

Value proposition

(Kotler,2012)

Positioning strategy: A positioning strategy is a deliberate branding plan or process that operates on the symbolic levels of consumer consciousness, where meanings and associations – even of individual words – really hold weight.

Typically, buyers see MAC as a more expensive and advanced cosmetic brand than its competitors (Urban Decay, Nars, Sephora, Smashbox…) MAC is a mid-range cosmetic brand, costs under $50.00 but provides diversity in selection for customers when it comes to lipstick colors(over 200 colors). Recently, MAC has focused on price-quality positioning strategy which highlights a superior quality product that are believed to be possessed. If there were changes in positioning strategy,to focus not only on producing higher priced products with superior quality, but also on the many features and benefits offered, MAC would be known as a successful company and trusted to be used by tons of consumers.

We all know MAC’s reputation depends mainly on word of mouth, it’s a strength but also a weakness for the brand. With the use of positioning strategies that showcase product features and benefits, the consumers will be able to see how

truly MAC is superior in quality, instead of hearing how good MAC’s make-up products are. They said “ Observation is the best teacher” ,which MAC should learn to improve and develop itself.

With the new strategy, the MAC brand can widen the market to who used to be unable to purchase its products.

“More for the same” positioning.

“More for the same” :companies can attack a competitors ’s more for more positioning by introducing a brand offering comparable quality with lower price.

In addition, one of the benefits when choosing MAC is their contribution to different social program such as MAC- Cruelty free beauty, Back to MAC recycling program, MAC Kids Helping Kids, MAC Viva Glam which 100% purchase price goes to MAC Aids Fund.

In a word, the MAC Cosmetics brand has become successful by developing relative aspect, using effective policy on core values, well managed the customer relationship, along with continuously keeping its promises overtime.

CONCLUSION

I have presented micro and macro factors, proposed segmentations, decided the target strategy, demonstrated consumer’s behavior and proposed new positioning of MAC Cosmetics company.

References http://www.maccosmetics.com/ (accessed June 4th,2016)

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http://www.maccosmetics.com/ (accessed June 4th)

http://www.slideshare.net/zoeparisbrook/mac-makeup-marketingbrand-assessment (accessed June 5, 2016)

http://www.ladyrattus.com/2012/12/a-case-study-on-mac-cosmetics-worlds.html (accessed June 5, 2016)

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Gary Armstrong, Philip Kotler,1980, Title : Principles Of Marketing. Published by Prentice Hall College Div, 14 editions.