MAC Makeup Marketing/Brand Assessment

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This project was the final project for the Marketing Management 2 course at McGill university. We represented team MAC, and "battled" against team Make Up Forever, a competing cosmetics brand. This project resulted in our team winning the battle, as well as top marks in the class.

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Battle of the Brands: ���

���The Makeup

Wars ���

Julie Browne Zoe Brook Kate Nishida Erica Murray���

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CONTEXT ���

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HISTORY ���

 

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E S T E E L AU D E R ���  

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SCOPE ���  

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SIZE ���

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SIZE ���

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ORIGINAL��� IRREVERENT���

COSMOPOLITAN��� INNOVATIVE���

B R A N D P E R S O NA L I T I E S ���

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R  

B R A N D E V O L U T I O N /E Q U I T Y ���

AWARENESS��� IMAGE���

Projective SURF

Recall Recognition

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“When you think of makeup brands, which ones come to mind?”���

RECALL���

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RECOGNITION���

95%    

YES���58%���

NO���

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MAC ���ASSOCIATIONS���

“Expensive, quality makeup variety.”���

“Eye-shadow, Lipstick, Employees”���

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MAKEUP FOREVER ���ASSOCIATIONS���

“foundation, long lasting, professional”���

“Nothing”���

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MAC PROJECTIVE���

Powerful, Independent, Sexual���

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MAKEUP FOREVER PROJECTIVE���

MAKEUP ARTIST���

Trustworthy, Professional, Credible���

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MARKET ANALYSIS ���

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I N D U S T RY A NA LY S I S ���

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1���

2���

3���

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5���Buyer Power���

Supplier Power���

Barriers to Entry/ Exit���

Degree of Rivalry���

Substitutes���

Five Forces Analysis���

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G L O B A L M A R K E T VA L U E ���

0���

5���

10���

15���

20���

25���

30���

35���

40���

2006��� 2007��� 2008��� 2009��� 2010���

Mill

ions

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Sales ($M)��� $3.5 Billion���

Increasing Trend���

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G L O B A L V O L U M E S O L D ���

3,200��� 3,300��� 3,400��� 3,500��� 3,600��� 3,700��� 3,800��� 3,900��� 4,000���

2006���

2007���

2008���

2009���

2010���

Units in millions���

Units  

$3.9 Million��� Increasing Trend���

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M A R K E T A NA LY S I S ���

Face ���36%���

Nail ���11%���

Lip���25%���

Eye���28%���

Market Segmentation by Make-up Component���

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M A R K E T A NA LY S I S ���

41.2���

30.5���

25.7���

2.5���

Global Market Segmentation���

Europe���

Americas���

Asia-Pacific���

Africa and Middle East���

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M A R K E T A NA LY S I S ���

23.7���

7.7���

7.4���61.2���

Global Make-up Market Share in 2010���

L'Oreal S.A.���

The Procter & Gamble Company���

The Estee Lauder Company���

Other���

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63 countries

C O M P E T I T O R A N A LY S I S ���

MAC��� MUF���

$20

$60.79 SP��� €126.75 SP���52 countries

$20

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C O M P E T I T O R A NA LY S I S ���

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C O M P E T I T I V E S E T ���

Without metrics for MAC cosmetics, we will compare Estee Lauder with LVMH���

Estee Lauder��� LVMH���

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C O N S U M E R A N A LY S I S  

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MARKETING MIX ���

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PRODUCT ���

150���eye shadow shades���

160���lipstick shades���

Critter Friendly���

foundation shades���

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Product  Differen1a1on  Strategy  -­‐  Enhancers:    

-­‐  Develop  different  blends  of  pigments  to  match  customer’s  needs  in  interna1onal  markets  (BRIC)  

-­‐  Develop  different  durability/intensity  of  pigments  and  viscosity  to  meet  PRO  versus  consumer  customer  needs.  

-­‐  Drivers:    -­‐  Durability  of  long  las1ng  pigments  and  rela1vely  large  product  sizes  

-­‐  Quality  Aesthe1cs:  -­‐   dis1nct  packaging  and  limited  edi1on  

 

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BRAND EXTENSIONS ���

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Economies  of  scope  through  product  family  strategy:  aggregated  materials  and  produc1on  processes  over  brand  extensions  lowers  VC,  allows  for  more  frequent  extensions.    

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PLACE ���

North  American  

Department  Stores,  27%  

Interna1onal  Department  Stores,  27%  Perfumeries,  

13%  

Retail  Stores,  10%  

Travel  Retail,  11%  

Salon  Spas,  10%  

Other    8%  

2012 net sales by distribution Estee Lauder���

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PLACE ���MAC Canadian Channel Direct

Distribution���

End consumer

End consumer

www.

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C H A N N E L P E R F O R M A N C E ���

 1. Customer Reach (volume)���

•  Professional + Consumer •  Trade shows, E-marketing

2. Operating Efficiency (cost to serve)���•  Higher margins •  Subsidiary Benefits

3. Service Quality (retention)���•  Customer Intimacy •  CRM •  Value added sales and services  

 

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PRICE ���1. Value-in-Use Premium Pricing Strategy���•  Consumer benefit > cost

2. Company/Product Lifecycle���•  Brand extensions justify premium

“skimming” price •  Multi-segment Pricing

3. Comparable Prices to Competitors���•  Differentiation •  Focus on customer loyalty •  Cost of switching

4. Product Line Pricing���•  Complementary products

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P R O M O T I O N ���

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VIVA GLAM���

100% PROFITS TO AIDS FUND���ONLY ADVERTISED PRODUCT���

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RESULTS ���

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RESULTS ���2012 Estee Lauder Financial Highlights ���

$9.7 Billion in Net Sales à 10% Growth Rate���

$8.56 Billion in Net Earnings à 20% GR ���

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$8.8 Billion���

$3.2 Billion���

2 0 1 1 S A L E S R E V E N U E S ���

Estee Lauder��� LVMH���

COSMETICS & FRAGRANCES���

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BRAZIL BRAZIL BRAZIL ���

3rd Largest Global Beauty Market ���MAC had a 40% Growth Rate in 2011���Succeeding in NINE Cities since 2002���Makeup Forver Opened FIRST Store

This Year���������

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RECOMMENDATIONS ���

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R E C O M M E N D AT I O N S ���

Short Term  

Employee Attitudes���Increase Store & Employee Evaluations

Focus on Industry Pros Introduce Store Etiquette Page

Positivity!            

     

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R E C O M M E N D A T I O N S  

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QUESTIONS ���

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