International business analysis of M.A.C cosmetics

8/11/2019 International business analysis of M.A.C cosmetics

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Introduction to the World of the Make- up Art Company

MAC cosmetic, Makeup Art Company, is a brand of Estee Lauder and was founded in 1984.

MAC has been abe to ad!ertise itsef uncon!entionay by the company "i!in" away its productsto makeup artists who worked with ceebrities. MAC was in!ented specificay for the achie!ed

ook wanted of fashion modes in certain i"htin" conditions. #his makeup brand is considered to

be $%rand &ositionin" of Makeup for a a"es, a races,' and a skin types. $MAC makeup is

attitudinay hip, artfuy irree!ant, dedicated fuy to the art of sef(decoration and the

reai)ation of the indi!idua.' *n 1994 MAC was the first cosmetics brand to brin" a charity,

which was for A*+, into the retai en!ironment. #his was the "reat be"innin" to the company

marketin" strate"y, as with the A*+ fund, whene!er anyone bou"ht their -*-A LAM ipstick,

which first came in a uscious red of representation, they "a!e a of the profits to their charity

which heped ead their saes as we as rose up to /90 miion in charity profit. MAC aso "i!es

out their new products to be re!iewed to ou tube makeup "urus and beauty bo""ers. #his keeps

to the traditiona aways(works promotiona strate"y of word(of(mouth ad!ertisement. 2ew

products are "i!en out to be re!iewed e!ery coupe of months, especiay durin" seasons, and

new charity information is promoted at east once e!ery year.


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Situation Analysis: Internal Environment

Current Marketing O!ectives" Strategy" and #erformance

#he current marketin" "oas and ob3ecti!es of MAC cosmetics as stated in their 558 annuareport, is $maintainin" unwa!erin" commitment to brin"in" the best to e!eryone they touch

whie continuay e6pandin" into new re"ions, new distribution channes and new brands.' #he

CE7 of Estee Lauder, owner of MAC cosmetics, Leonard Lauder, states that his company can

and wi be abe to "row e!en durin" these economic troubes with $unparaeed muti(nationa,

muti(channe and muti(brand strate"y' this meanin" their o!erseas retai estabishments and

onine shoppin". iiam Lauder hi"hi"hts the stren"ths that Estee Lauder currenty has, which

is their abiity to isten to their customers as we as their thirty(two thousand dedicated

empoyees. #hese marketin" "oas and ob3ecti!es are consistent with their corporate mission as

they are branchin" out to other sources, such as openin" muti(nationa stores around the word

in order to continuay open up their brand name to new paces and bein" abe to sti make a

comfortabe profit. Estee Lauder as the o!era company aso pans to $capitai)e' it:s stren"ths

by prioriti)e their in!estments, $e6ercise "reater financia discipine', and be"in to $operate in a

more cosey ai"ned manner across the business units and borders.'

Aready noticin" within the year of 559, this marketin" strate"y has been a success.

$MAC continues to be the eadin" presti"e makeup ine in 2orth America and its "oba net saes

rose by doube di"its,' states iiam Lauder. ith makeup accountin" for thirty(ei"ht percent of

the net saes for Estee Lauder in the year of 558, MAC is responsibe for two(thirds of those

saes.

Estee Lauder e6pects to see $doube(di"it "rowth' in %ra)i:s beauty market with MAC

and Cin;ue aone. #he makeup ine has aso raised /


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Admired Companies' by >orbes, it was a tremendous accompishment for MAC and they intend

to stay in the $tripe bottom ine' for the future. MAC has become more and more "obay aware

to new consumers with their saes constanty boomin" and e6ceptiona marketin" strate"y now

"oin" internationa.


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Current and #otential Customers

Make(up Art Cosmetics: demo"raphic is simpe. *t:s for fashion forward women...and

men. *t is tar"etin" toward professiona make(up artists howe!er, most of it is sod pubicy so

anyone can buy the products. #here is a MAC &ro coection where ony professiona access is

a!aiabe, but their pubic ine has amost as many coors and toos a!aiabe to work with.

MAC:s purpose is !ery customer oriented and was desi"ned for a a"es, a se6es, and a races.

E!en thou"h MAC does not necessariy ha!e a set demo"raphic, bein" a MAC consumer, * the

a!era"e a"e of their consumer is, in my opinion, between twenty and thirty(se!en. * say this

because * ha!e ne!er seen anyone oder than their ate thirties in a MAC store, then a"ain, *:m

not incudin" the ceebrities or anyone that is famous that has been introduced to the product

before it is sod to the "enera pubic. * ha!e seen e!ery race and "ender in the stores so it pro!esthat their cosmetic coors can work for e!eryone with any skin type and tone. #he ma3or

infuences of me personay buyin" MAC ha!e been word(of(mouth and outube make(up "urus.

* ike that * can see what the coors ook ike on and know that there are a ot of peope who ike

the brand as we.


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Customer #urchase #atterns and $ehavior

7ne MAC eye shadow is sod e!ery two seconds around the word ?Estee Lauder

Companies, 558@. 7ne MAC ipstick is sod e!ery four seconds around the word, and ei"hty

percent of women wear it. E!ery time a person "oes into MAC e6pectin" to purchase one item,

they come out with three and spend an a!era"e of forty(fi!e doars. #he a!era"e customer who

shops at Make(up Art Cosmetics makes an a!era"e income of two(hundred and fifty thousand

doars annuay or more. ith statistics ike this, MAC must be doin" somethin" ri"ht. About

ei"hty(three percent of peope who come into a MAC store were referred to by a friend. hen *

"o into a MAC store for e6ampe, * assume that they ha!e "ood products because * ha!e ony

heard "ood thin"s about them howe!er, * want that persona one(on(one time with their beauty

consutants to see what they can do to my face, and too see if * can recreate it. %esides Make(upArt Cosmetics ha!in" retai ocations word(wide, they aso ha!e an onine store with $i!e chat'

abiity for persona ad!ice. Makeup how(to !ideos ha!e become !ery popuar with cosmetic

companies today, howe!er MAC has been the first of its kind to ha!e the abiity to ha!e an actua

onine con!ersation with a makeup artist. 7nine shoppin" has become e6tremey popuar in

today:s society because it is easier for the consumer to see what the company has to offer in the

pri!acy of their own home, and with today:s society bein" on the mo!e a the time it is a much

faster process. E!en thou"h onine saes are boomin", in my e6perience of istenin" to beauty

outube bo""ers and readin" onine bo"s about MAC, * ha!e come to notice that a ot of

customers prefer to "o into the store itsef, aone, because of the persona one(on(one contact.

Make(p Art Cosmetics is not your typica cosmetic company that has their associates battin"

with their commission "oa and is pressurin" you to buy their product, no, this wi not happen.

MAC:s consutants are paid a hi"h houry wa"e so they can concentrate on their reationship

with the customer and make sure they "i!e e!eryone their own $authentic artistic e6perience.'

#his $authentic e6perience' has ead to Estee Lauder openin" up more freestandin" stores

around the word and heped achie!e that persona pamper time that e!ery women o!es.


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Customer Selection and #urchase Criteria

#he difference between MAC make(up and other cosmetic companies "oes as foowsB cruety(

free, a !ery ar"e !ariety of eye shadows and ipsticks, has make foundation shades for e!ery

skin coor, pro!ides ar"e portions of profit to charities, encoura"es recycin" their packa"in" ?so

much so that you can "et a free ipstick, ip "ass, or eye shadow if you brin" in si6 shoppin"

ba"s@, and has e6ceent persona consutin" without the purchase hasse. Many cosmetic

consumers ha!e troube findin" certain shades, whether it is foundation or eye shadow. ome

companies do this soey for the purpose of persuadin" their customer to buy two shades to up

their profit. owe!er, this does not sit we with most customers they want to be abe to know

that they can ha!e one shade that matches their skin tone. 7ther competitors such as 2AD,

+ior, and Makeup >ore!er ha!e the foundation shades down(pat, howe!er ack in the eyeshadow coection. #he coor seection of MAC:s eye shadows is their stron"est sein" point

because there is so much that a customer can work with. Most cosmetic companies se their eye

shadows in a four coor paette. 2ow, this can be seen as a "reat idea or an irritatin" one. #he

idea of a paette, which usuay comes in four, is so that the customer can see what coors to

coordinate with. Most traditiona makeup companies make eye shadow paettes to coordinate

with the season:s coors, and MAC foowed this trend in the be"innin", howe!er it did not take

into effect !ery on" due to the company sein" sin"e eye shadow pans from the start of the

company. Make(up Art Cosmetics has traditionay sod sin"e eye shadow pans and has had a

ar"e back fifteen eye shadow paette a!aiabe for sae, howe!er ne!er had coordinated paettes

a!aiabe for sae unti recenty. #he "ood thin" about paettes is you can "et four eye shadows

that a coordinate to"ether. #he bad thin" about paettes is that you cannot aways choose

different coors if you wanted tounti now. ith MAC:s new four shadow paettes a!aiabe,

you can buy the four coors a!aiabe or you can choose the four coors you want. Another "reat

thin" about the new four coor paette from MAC is that it ony cost thirty(si6 doars, which is

much cheaper than buyin" them indi!iduay considerin" each eye shadow cost around fourteen

doars apiece. Makeup paettes from +ior cost around si6ty doars which is the cost of a four

eye shadows combined.


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#otential Customers and %heir &ack of #urchase $ehavior

#he basic needs of non(customers that MAC:s products and ser!ices do not meet woud

probaby ha!e to be price. ome peope 3ust simpy cannot afford their make(up. #here are "ood

dru"store brand cosmetics a!aiabe that they know they can "et for a cheaper price and coud

work 3ust as we. #hrou"h my e6perience, * know that L:7rea:s .*.& eye shadow coection is

around the same ;uaity as MAC and that they use to cost around nine doars for an eye shadow

duo, howe!er, their marketin" team has reai)ed that their consumers know this and ha!e now

raised their prices to thirteen doars per duo to stay beow MAC:s pricin". &ersona option is up

in the air for "ood ;uaity make(up comparabe to MAC. *t is up to the consumer if they want to

pay for the persona ser!ice of MAC or they want to pay a itte under the same amount for a

somewhat cheaper route.


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Situation Analysis: E'ternal Environment

Current Economic Conditions, Le"a, and De"uatory *ssues

ith Estee Lauder takin" their brands into forei"n countries, this raises the issue of interest rates,forei"n e6chan"e, and each countries indi!idua issue, such as terrorism and war. *nterest rate

contracts for Estee Lauder in the year of 558 were thirty(one miion doars. Estee Lauder aso

had one miion doars to put towards currency forward contracts in which Euro:s were the most

e6pensi!e. Conse;uences that pose a threat to openin" up stores in the Midde East are $terrorist

attacks, retaiation, and the threat of further attacks or retaiation.' owe!er, accordin" to Estee

Lauders 558 fisca annua report, saes were up by twenty(two percent throu"hout the Midde

East and amost haf of their net saes came from forei"n countries. #his increase in profit is

possiby due to the peope wantin" and bein" abe to ha!e their own persona pamperin". Aso

considerin" this increase in saes, the consumers of Make(up Art Cosmetics seem ha!e a !ery

optimistic opinion of the economy in its current condition and with this MAC has sti been

"rowin" financiay and re"ionay.


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%echnological Advancements of Importance

ith MAC ha!e tremendous success with their word(of(mouth strate"y boostin" their onine

en!ironment wi hep their saes si"nificanty. Accordin" to a study by Mc=insey F Co. GHupiter

Media Metri6 that was pubished in %a)aar-oice *ndustry tatistics, $users who contribute

product re!iews or post messa"es !isit sites nine times as often as non(contributors do.

Contributors aso make purchases neary twice as often.' ith more brand reco"nition MAC

coud ha!e more of a positi!e name and more abiity to ha!e a ar"er ran"e of free standin"

stores. ince MAC is aready known widey by word(of(mouth, addin" more onine

concentration wi be !ery beneficia for the promotiona aspects of the company. a!in" more

onine shoppin" a!aiabe, this wi mean more ad!ertisin" e6penses howe!er that shoud be an

in!estment that Make(up Art Cosmetics can make.


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(IS%O)*

MAC Cosmetics, Makeup Artist Cosmetics, was founded in#oronto,7ntario, Canadaby >rank

#oskan and >rank An"eo in 1984 with the assistance of chemist -ic Casae. #he first .MAC

store opened in 1991, in 2ew ork.

#he companyIs products were initiay specificay desi"ned for professiona make(up artistsbut

are now sod to consumers wordwide. Lon" before their company history, MAC cosmetics

founders directed their product ine towards professionas in the beauty and fashion industry who

had to rey on hea!y cosmetics, cake makeup, and sta"e makeup to create the !isua effects

needed to withstand bri"ht i"htin" durin" photo shoots. MAC cosmetics can be found

at department storeswordwide such as%ek,2ordstrom,MacyIsand +iardIs, as we as MAC

tores. 2ordstrom was the first department store in the nited tates to se the product

e6cusi!ey and was si"nificant in hepin" the company estabish a resoundin" financia success

in the . After a four year contract was up, MAC be"an e6pandin" to other retai stores and

!i"orousy be"an openin" industry stores.

EstJe Lauder Companiesac;uired a controin" interestin MAC in 199K, then competed their

ac;uisition of the company in 1998. 7ri"ina founder >rank An"eo died in 199 due to

compications durin" sur"ery.
http://en.wikipedia.org/wiki/Torontohttp://en.wikipedia.org/wiki/Torontohttp://en.wikipedia.org/wiki/Torontohttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Make-up_artisthttp://en.wikipedia.org/wiki/Department_storeshttp://en.wikipedia.org/wiki/Department_storeshttp://en.wikipedia.org/wiki/Belkhttp://en.wikipedia.org/wiki/Belkhttp://en.wikipedia.org/wiki/Belkhttp://en.wikipedia.org/wiki/Nordstromhttp://en.wikipedia.org/wiki/Nordstromhttp://en.wikipedia.org/wiki/Macy'shttp://en.wikipedia.org/wiki/Dillard'shttp://en.wikipedia.org/wiki/Est%C3%A9e_Lauder_Companieshttp://en.wikipedia.org/wiki/Controlling_interesthttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Make-up_artisthttp://en.wikipedia.org/wiki/Department_storeshttp://en.wikipedia.org/wiki/Belkhttp://en.wikipedia.org/wiki/Nordstromhttp://en.wikipedia.org/wiki/Macy'shttp://en.wikipedia.org/wiki/Dillard'shttp://en.wikipedia.org/wiki/Est%C3%A9e_Lauder_Companieshttp://en.wikipedia.org/wiki/Controlling_interesthttp://en.wikipedia.org/wiki/Toronto


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MISSIO+

$A Daces, A e6es, A A"es' concei!ed to embrace a consumers. #o be the words eadin"

make(up authority amon" both professiona make(up artists and consumers. #o meet customers

need for superior ;uaity ser!ices and to pro!ide secure F chaen"in" work en!ironment for a

empoyees. As an or"ani)ation it commits itsef to hi"h standards and creati!e de!eopment with

an enterprise concept that a pains ha!e "ains.


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,ISIO+

MAC cosmetics were founded with a creati!e !ision to fi the "ap between makeup artistry and

fashion photo"raphy. Lon" before their company history, MAC cosmetics founders directed their

product ine towards professionas in the beauty and fashion industry who had to rey on hea!y

cosmetics, cake makeup and sta"e makeup to create the !isua effects needed to withstand bri"ht

i"htin" durin" photo shoots


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O.) #/s O I+%E)+A%IO+A& MA)0E%I+1

#)O2.C%S

MAC pro!ides a wide !ariety of products for the e!eryday consumer such as eye shadows,

ipsticks, ip("oss, a types of foundations, conceaer, nai poish, sta"e makeup, and mascara.

Amon" a of these make(up products, MAC aso ses fra"rances, make(up brushes, and skin

care products

7n Hanuary 8, 511, arner %ros. Consumer &roducts announced that +C ComicsI fictiona

heroine onder omanwoud team up with MAC Cosmetics to create a onder oman

makeup coection that woud be a!aiabe in MAC stores in the sprin" of 511. #he coection

incuded bush, eye shadow, eyeiner, ip "oss, ipstick, mascara, minera powder and nai poish.

Most MAC products are oi free. ome MAC products do contain natura ois which function

as emoients?for e6ampeB oran"e oi,3o3oba oi@.

MAC #)O
http://en.wikipedia.org/wiki/DC_Comicshttp://en.wikipedia.org/wiki/DC_Comicshttp://en.wikipedia.org/wiki/DC_Comicshttp://en.wikipedia.org/wiki/Wonder_Womanhttp://en.wikipedia.org/wiki/Emollientshttp://en.wikipedia.org/wiki/Orange_oilhttp://en.wikipedia.org/wiki/Orange_oilhttp://en.wikipedia.org/wiki/Jojoba_oilhttp://en.wikipedia.org/wiki/DC_Comicshttp://en.wikipedia.org/wiki/Wonder_Womanhttp://en.wikipedia.org/wiki/Emollientshttp://en.wikipedia.org/wiki/Orange_oilhttp://en.wikipedia.org/wiki/Jojoba_oil


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#ersonal Selling:

&ersona sein" is one of the odest forms of promotion. M.A.C Cosmetics foows this

strate"y and stands out as the wordIs ar"est make up company.

Advertising:

M.A.C. Cosmetics was initiay distributed amon" friends ony in the fashion industry

and ti today M.A.C. does not e!er ha!e to conduct any kind of ad!ertisin". #his is a

credited to word of mouth pubicity and ceebrity endorsements, which usuay incudes

modes, pro make(up artists and actresses.

Advertising ,iva 1lam

M.A.C uses ceebrities such as 2icki Mina3, Dicky Martin and Lady a"a to

promote -i!a am product ine.


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#&ACE

Mac cosmetics uses e6cusi!e retai outet pace to se their product rather than choosin"

another distribution channe.


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#)ICE


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COM#E%I%I,E A+A&*SIS

MAC cosmetics are owned by parent company EstJe Lauder and competes directy with L:7rJa

brands Maybeine and De!on in the Canadian cosmetic industry. L:7rJa currenty hods the top

spot in cosmetics. De!on is another competitor in cosmetics.

De!on products are sod at competiti!e prices whie MAC is sod at !aue based prices.

Lorea and De!ons: ori"ina products are a!aiabe in oca market but ori"ina M.A.C:s products

are not a!aiabe. Compare to MAC products the prices of Lorea and De!on are much cheaper

and thus a!aiabe to the common peope, %ut howe!er how much costy the MAC products

may be but ;uaity of MAC products are much better than Lorea and De!on


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SOCIA& )ES#O+SI$I&I%IES

MAC has fi!e socia initiati!e pro"rams currenty in pace

MAC Cruety(>ree %eautyB MAC formery "uaranteed that no anima testin" was

performed by them or their suppiers, howe!er MAC no on"er "uarantees its products are

cruety free. Current poicy is that 7ur products are not tested on animas e6cept when

absoutey mandated by aw'.

%ack MAC Decycin"B offers free ip"oss, eyeshadow, or ipstick at any MAC ocation

?ipsticks ony at MAC counters in department stores@ with the return of si6 empty MAC

containers. #he ony items that can be obtained free throu"h %ack MAC are ori"ina

Lip"ass ?e6cudin"B Lustre"ass, &ush"ass, Cremesheen ass, &ro Lon"wear Lip"ass and

+a))e"ass@, sin"e ?non(refi, sma(si)e@ eyeshadows ?e6cudin" &ro Lon"wear,

Minerai)e, and &ressed &i"ments@, and ipstick in the ori"ina back and si!er buet

packa"in". -i!a am, Minerai)e, heen upreme, and &ro Lon"wear ipsticks, as we as

ipsticks in specia decoration packa"in", are e6cuded.

MAC =ids epin" =idsB started in 1994 where kids affected or infected

by *-GA*+create ima"es that are reproduced as "reetin" cards. 155N of sein" price"oes back to participatin" or"ani)ations.

#he MAC A*+ >undBO9Psupports community or"ani)ations pro!idin" direct ser!ices to

men, women and chidren affected or infected by *-GA*+. #o date the foundation has

raised o!er /90,555,555 usd since its inception in 1994.

MAC -i!a amB 155N of the purchase price of any -i!a am product ?ipsticks,

ip"asses and hoiday sets@ "oes to the MAC Aids >und. Mutipe Ceebrities ha!e endorsed

the MAC -i!a am products, such asB Du&au,Lady a"a,Cyndi Lauper, Eton Hohn,2icki

Mina3, Christina A"uiera, Dihanna, %oy eor"e, Dicky Martin, +ita -on #eese, hirey

Manson, Mary H. %i"e and more.
http://en.wikipedia.org/wiki/HIVhttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/MAC_Cosmetics#cite_note-9http://en.wikipedia.org/wiki/Lady_Gagahttp://en.wikipedia.org/wiki/Lady_Gagahttp://en.wikipedia.org/wiki/Cyndi_Lauperhttp://en.wikipedia.org/wiki/Cyndi_Lauperhttp://en.wikipedia.org/wiki/Elton_Johnhttp://en.wikipedia.org/wiki/Elton_Johnhttp://en.wikipedia.org/wiki/Nicki_Minajhttp://en.wikipedia.org/wiki/Nicki_Minajhttp://en.wikipedia.org/wiki/Christina_Aguilerahttp://en.wikipedia.org/wiki/Rihannahttp://en.wikipedia.org/wiki/HIVhttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/MAC_Cosmetics#cite_note-9http://en.wikipedia.org/wiki/Lady_Gagahttp://en.wikipedia.org/wiki/Cyndi_Lauperhttp://en.wikipedia.org/wiki/Elton_Johnhttp://en.wikipedia.org/wiki/Nicki_Minajhttp://en.wikipedia.org/wiki/Nicki_Minajhttp://en.wikipedia.org/wiki/Christina_Aguilerahttp://en.wikipedia.org/wiki/Rihanna


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S(I##I+1

A orders are processed and shipped on business days ony, Monday throu"h >riday, e6cudin"

ma3or hoidays.

7rders paced on aturday and unday wi be processed on the foowin" business day.

hippin" char"es start at /0.55 and increase with the !aue of your order. #he order !aue is the

subtota of customer:s order not incudin" ta6 or "ift wrap char"es.

*f the order ony contains MQAQC ift Cards, customer wi be char"ed /0.55 for tandard

hippin".

#he order tota used to cacuate hippin" and andin" fees wi not incude the !aue of the

purchase of MQAQC ift Cards or eift Cards.

R nd +ay orders wi be processed the same day the order is paced if one:s order is recei!ed by


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( uam

M& ( 2orthern Mariana *sands

-* ( -ir"in *sands

>M ( >ederated tates 7f Micronesia

M ( Marsha *sands

& ( &aau

A ( American amoa

&D ( &uerto Dico

Most items may be shipped to Aaska, awaii and the .. #erritories, but some restrictions

appy.

S(I#ME+%S %O I+%E)+A%IO+A& A22)ESSES

#hey currenty unabe to accept orders bied or shipped to destinations outside of the nited

tates.

&ease note, many MQAQC Cosmetics counters internationay wi process phone orders.

Complimentary Shipping

hen pacin" an order, we make it easier with compimentary shippin". &urchase /105 ?after

discount@ of MQAQC products and we wi ship free of char"e by courier ?re"uar "round

shippin"@ within the and Canada. ome restrictions appy. Limit fi!e compimentary

shipments per year, per member.


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$.SI+ESS #&A+

M.A.C cosmetics has a cear business ob3ecti!e to promote Make(up products and ser!ices.

#hese products and ser!ices ha!e been de!eoped o!er


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LA#E# 2ET

*n the recent years, MAC has sowed down its spreadin" out around Europe and does not intend

any sae strate"y chan"es or new retai sae contracts. ince there is no onine sae throu"h

*nternet outside the nited tates, Centra and East Europeans ha!e no possibiity to buy the

MAC cosmetics e6cept tra!ein" for it abroad. Additionay, weak promotion causes awareness

decine and ower saes for the ast fisca year. #he company uses ceebrities ?actress, sin"ers@ as

representati!es or modes for MAU cosmetics. owe!er, there is ack of ad!ertisements and

promotiona campai"ns that woud attract ordinary women to try the brand make(up.Hustification for the probem:s causes

Decent sow e6pansion of the company is caused mainy by the imited ways of sae and by the

worries about the oss of contro in the case of penetratin" new markets. #he company does not

think about any other practices than retai contract saes and refuse the offers from abroad to "et

MAC products in there. $#he demand for MAC Cosmetics is there, but the suppy is not. hie

MAC is one the cosmetic ines hi"hest in demand, findin" discounted products is actuay not

that easy' ?-asen, 55, p. 1 @ Moreo!er, there are no media ad!ertisement outside the nitedtates and peope often do not e!en know about the products and their ad!anta"es. #he statistics

show that the eadin" way to "et information about MAC products is !ia referras ?%ates, 55K,

p. @. ince there is a ack of promotiona campai"ns with no free sampes, the company can ony

rey on the e6istin" customers to spread the information about MAC products.

Aternati!e soutions

#here are se!era aternati!es how MAC can penetrate new markets, mainy Centra and East

Europe and aso how to make peope more aware of its hi"h(;uaity cosmetics. *t is "ood to

consider different ways of the sae strate"y, such as e6portin", franchisin", or retai sae !ia

contracted distributors.

>irst aternati!e that can hep the company to "et its products further abroad is e6portin".

E6portin" can be performed by the company itsef or it is sometimes "ood to use e6port a"ents


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that work as intermediaries between the company:s home country and the forei"n country ?or

e!en more forei"n countries@ to which the company wants to e6port its products. #he foowin"

SWO% Analysis for E'porting

tren"ths eaknesses

Deachin" new markets hi"h initia and administrati!e e6penses

Low fi6ed costs ad3ustments

i"her re!enues formaities

Corporate "rowth distributor contracts

7pportunities #hreats

*nno!ation tou"h competition

"oba e6pansion poitica and economica impediments

internationa awareness of the brand


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MAC can benefit from e6portin" because of "ettin" its products e!erywhere at reati!ey ow

costs. #he products can be distributed by e6terna intermediaries and se at the wordwide

markets without any direct in!o!ement of the company. owe!er, it re;uires se!era

ad3ustments of the products to be made by the company itsef, such as packa"in", and some other

modifications that woud suit to different nations. Aso, there can be some administrati!e

obstaces that the company has to so!e in order to make "ood a"reements with the distributors.

7n the other hand, e6portin" can pro!ide internationa awareness of the brand connected with

the desire to inno!ate e!en more. #he threats that can occur in the case of e6portin" can actuay

occur aso in other ways of marketin" practices, that is tou"h competition or poitica and

economica impediments that make the product offerin" harder and more costy ?Ad!anta"es F

disad!anta"es..., 55, p. 1@.

econd aternati!e in order to reach new markets is franchisin". >ranchisin" is one of the most

widespread forms of cooperation between companies a around the word. A franchisor is the

founder of the whoe system and represents a core for the whoe network of franchisees. #he

parent company de!eops and mana"es the conditions at which the franchisees function and

actuay ses its business ob3ecti!e. *n the chain of franchisees, each one is an independent

business unit but its operation is partiay controed and imited by the parent company:s

marketin" conception. #herefore, franchisin" pro!ide both ad!anta"es and disad!anta"es for the

franchisor as we as for a franchisee.


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SWO% Analysis for ranchising

tren"ths eaknesses

money infow hi"h marketin" costs

new market penetration ower fe6ibiity

cooperation with oca peope personne trainin"


creati!ity possibe oss of contro

"oba e6pansion cutura differences

internationa awareness of the brand worsenin" reputation

7ne of the "reatest ad!anta"es of franchisin" is money infow from the franchisees, which pay

for the ri"ht to se the MAC products, for the brand name, and know(how. %eside that, the


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company can rey on the oca peope that know the oca market and can appy or ad3ust the

ori"ina marketin" strate"ies directy to the oca customers. #hat can brin" new inno!ati!e ideas

and su""estions for modification in order to fit the products to the oca market. owe!er, there

is a possibiity of faiin" in the case of appication the strate"ies that arose somewhere ese in the

word. #here can be present ow fe6ibiity whie communicatin" on the on" distances and aso

hi"her initia cost for trainin" the empoyees and make them do what the parent company wants.

*f the oca company does not fufi the re;uirements setted in the franchisin" a"reement, it can

threaten the company:s reputation e!en on the internationa e!e. Aso, it is ine!itabe to

consider the cutura differences and ad3ust the products as much as possibe to those different

needs and habits.

#hird aternati!e is to stay with the actua system, so to distribute the products !ia contracted

internationa perfumeries or own stores mana"ed from the centra office, but brin" a new

promotiona strate"y that can aso hep to penetrate new markets and aso increase saes in the

e6istin" markets.

SWO% Analysis for International #romotional Strategy


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tren"ths eaknesses

pubic awareness hi"h cost for ad!ertisin"

hi"her re!enues and saes +i!ersity

stabe business contro


new markets "rowin" competition

"oba promotiona campai"ns pubic "ut for ad!ertisements

#he new promotiona strate"ies can pro!ide not ony reachin" new markets and spreadin" out the

awareness of the MAC products but aso it can si"nificanty hep to increase saes and re!enues.

ince the stores are the company:s ownership, and aso most of the empoyees or at east branch

mana"ers are directy from the centra office, there is a hu"e contro of prescribed marketin"

practices and not much space to break the re"uations. Decenty, ad!ertisin" is an ine!itabe part


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of sae and do the promotion ony throu"h ceebrities and modes is not enou"h. &eope cannot

know much about the product ;uaity without interacti!e campai"ns and free sampes that they

can try and make their own opinion about MAC cosmetics. 2o doubt, ad!ertisin" is not a cheap

matter and carefu bud"et pannin" is ine!itabe but the costs can be paid back soon by the

increased saes. 7f course, "rowin" competition or pubic "ut for ad!ertisements can threaten

the saes and the company:s success but it woud be pointed on the whoe market, not 3ust one

sin"e company.

)ecommended solution to improve sales 3orld3ide

>irst of a, the company shoud $determine the tar"et audience' in order to know how to focus

the promotions ?C)inkota F Donkainen, 554, p. 0


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se6es, a a"es', it woud be better to focus the promotions to women, especiay youn"er women

who can be the ar"est "roup of potentia customers ?MAC, 55, p. 1@. Aso, youn" and midde(

a"ed women more incined toward different coors and are ikey to e6perience new te6tures and

o!era makeup. econd, it is needed to $determine campai"n ob3ecti!es', so to make a research

about the oca market and sette the "oas that shoud be fufied by the campai"ns ?C)inkota F

Donkainen, 554, p. 045@. #he e6tent of the campai"n is aso determined and is infuenced by the

bud"et amount, so how much financia resources can be used for the promotions. *t must be

carefuy panned and ad3usted to the company:s abiities. *n the case of cosmetics, the best

$media strate"y' is to or"ani)e interacti!e meetin"s, workshops, and free sampes distribution

?C)inkota F Donkainen, 554, p. 041@. omen can try the products by themse!es and find out

their hi"h ;uaity. Aso, ad!ertisements in the femae ma"a)ines are a "ood way to make women

aware of the MAC brand. *t is a we(known fact that women are wiin" to pay ar"e amount of

money for cosmetics if it is worth, so e!en the hi"her prices of MAC cosmetics are not an

obstace in increasin" saes and attractin" new customers. MAC shoud use some successfu

promotiona a"ency for the campai"n conduct. #he a"encies ha!e the e6periences and skis to

prepare a hi"h(;uaity campai"n e!en on the internationa e!e. #he company itsef woud not be

abe to mana"e a the important thin"s that an internationa promotiona campai"n re;uires. #he

financia resources in!ested to the campai"n can be ;uicky returned by hi"her saes and more

customers attracted by the promotion.

E,A&.A%IO+

uccess of the new promotiona strate"y can be measured by se!era techni;ues. >or e6ampe,

$pre(testin" of copy appea and brand reco"nition, post(testin" of product or brand reco"nition,

and measurin" campai"n:s impact on saes' ?C)inkota F Donkainen, 554, p. 008@. *t is a !ery


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"ood measurement to compare the saes before and after the new strate"y appication.

Additionay, increasin" saes and increasin" number of re"uar customers are "ood si"ns of the

successfu campai"n. &ubic awareness of the MAC products can be aso measured by the

;uestionnaires and randomy asked ;uestions in the streets or beauty saons. &ropery panned

and conducted promotiona campai"n wi certainy hep the company to "et to the European

markets and increase pubic awareness of the MAC products.

I,E O)CES A+A&*SIS


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1&O$A&MA)0E% ,A&.E


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MA)0E% A+A&*SIS


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COM#E%I%O) A+A&*SIS


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C(A++E& #E)O)MA+CE


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I+A+CIA& A+A&*SIS


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Documents

International business analysis of M.A.C cosmetics