Cosmetic Industry Overview: According to a 2010 report, the Cosmetic Industry is estimated at a worth of 35 Billion dollars globally. The industry has an excess growth rate of 4% per year analyzed from the previous four years. By 2015 the industry is expected to remain in constant growth and at that time to be a 42 Billion dollar market. This report includes face make-up, nail make-up, eye makeup, and lip make-up. Now companies are also offering products that have skin care benefits including protection to UV rays, anti-aging, and moisturizing benefits along side their color, luminous, and ease of use within their products. Demand for products including organic ingredients is on the rise with consumers wanting plant extracts and vitamin E components included in the make-up. Make-up is generally sold at various retailers, grocery stores, pharmacies, and mass merchandisers. The US market share for the Cosmetic industry includes 6 billion dollars reaching a annual growth of 1% every year. Face make-up represents the leading market segments, reaching about 2.5 billion dollars making up 37% of the entire market. The market growth is expected to grow 2% per year bringing the over face market to 7 Billion dollars. Industry Powerhouses include Estee Lauder, LʼOreal, Amway, Shiseido, Physicians Formula, Avon, Chanel, Revlon, Oriflame, Coty, Procter & Gamble, Beiersdorf, Guerlain, Bourjois, Kose, Jiangsu Longliqi, and Mary Kay. With the coming years the cosmetic industry is looking to focus on product innovation, especially in facial make-up market. Face products are looking to lighter pigmented crystals within the make-up to create a flaw-less skin.
Client Overview: M.A.C. Cosmetics was founded by two Franks in 1985. Frank Angelo and Frank Toskan set out to create a makeup brand that appeals to “All Races, All Sexes, All Ages” which became the companyʼs mission statement from the get-go. The Toronto based Company grew through a “word-of-mouth” approach through out the Make-up industry. The two Franks initially gave away their products to top make up artists to use in photo shoots for professional models and celebrities. This tactic helped launch the company into stardom throughout the industry. M.A.C. generally does not advertise, as they have found out through their initial word-of-mouth approach that this can be just as effective to their consumers. M.A.C. was fully purchased by Estee Lauder in 1998 and has seen exponential growth under the Brand. M.A.C.ʼs missions statement “All Races, All Sexes, All Ages” is pertinent within their professional Cosmetic line through their numerous foundation options, colors, finishes, and their enormous line of Eye shadows, Lip sticks, powders, and brushes. The Target Markets for M.A.C. generally consists of:
Demographics: 18-30 Male/ Female Employed Student Educated
Psychographics: Unique Outgoing/ Sociable Confident Media Savvy Fashionable
M.A.C. is also a very socially responsible company who does not test on animals or even buy ingredients from companies that do testing. All of their high quality brushes are made from synthetic hair. M.A.C. has raised and donated over a many millions of dollars for the AIDS foundation. The Back to M.A.C. campaign is all about recycling your used M.A.C. containers at any M.A.C. store where the consumer may turn in six or more containers to receive a free eye shadow or lipstick.
Competitive Analysis: M.A.C.始s top competitors are: MAKEUP FOREVER SMASHBOX URBAN DECAY M.A.C. Cosmetics is one of the top rulers of the Make-up world. Alongside M.A.C. are Makeup Forever, Smashbox, and Urban Decay. All of these brands have huge recognition amongst many women and men and have about all of the same price ranges throughout their product lines.
M.A.C.: -Founded in Toronto Canada in 1984 by Frank Angelo and Frank Toskan -Created mainly for Photo shoots, theaters, stages for all ages, races, and sexes -Sold at MAC PRO stores, Macy*s, Dillards, Nordstrom, Bloomingdales, Belk -MAC PRO membership for industry professionals -Now under make up brand Estee Lauder
MAKEUP FOREVER: -Founded in 1984 in Paris France by artist Dany Sanz -Launched in the US in 1995 -Created for special effects/ textures, and products for Professional artists -Currently sold at Sephora -Makeup Forever Backstage card for industry professionals
SMASHBOX: -Founded in 1996 by Dean and Davis Factor -Smashbox Studios= Modeling agency, Photo Studio, Clothing Line -Bought out by Estee Lauder in 2012 -Currently sold at ULTA -Created for long lasting formulas designed to resonate flawless skin
URBAN DECAY: -Founded by Sandy Lerner, David Soward, and Wende Zomir -Launched in 1996 -Differentiated the market with outlandish colors and ad campaigns -Currently sold at ULTA, and Sephora
Strengths of M.A.C.: -Made for All Races, Genders, Ages -Named #2 on Forbes “Americaʼs Most Admired Company” list -Cruelty- Free -Huge Brand Recognition and Image -Raised over 95 Mil$ for HIV/AIDS Charity through M.A.C. Weaknesses of M.A.C.: -Expensive products -Only Professionals in the industry can get M.A.C.ʼs pro colors -Limited staff in store versus customers coming in -Pro Stores in Limited Locations -Not every M.A.C. counter is a pro store -Can only “BAC to M.A.C.” at pro stores in able to get more than just Lip Stick Opportunities for M.A.C.: -M.A.C. Seasonal Sales -Release limited amount of pro colors in stores -Open more pro stores rather than Counters -Create rewards system for Loyal consumers Threats of M.A.C.: -Competitors release seasonal Lip/Eye Palettes -Competitors rewards system -Competitors highly advertise/ sell products in cosmetic stores
MEDIA PLAN: Current strategy is to take consumers into a whole new world versus just selling products. MAC is present in 66 countries and over 1000 outlets around the world. Since the founders cannot directly communicate with their market, they heavily rely on their sales associates at MAC stores and counters to give advice to their consumers on techniques, trends, and formulas. MACʼs Media plan strictly relies on word-of-mouth through out the industry and social media. MACʼs facebook page has over 3 million “Likers” worldwide, and they focus on communication with these followers. Without spending a fortune on advertising, MAC gets across their message of the brand to their consumers through subtle ways and inspiring their consumers though their many charity campaigns. MAC has a cult like following and this is not due change in any type of near future. M.A.C.ʼs media plan will consist of Print, Radio, Outdoor, Internet, Global, Alternative Media, and Point of Purchase displays. The placement of these advertisements will rely heavily on the target consumers of M.A.C. and their personal habits. M.A.C.ʼs budget for Media plan is 13.9 million dollars for the year. The M.A.C. Media Plan will focus on outdoor advertising, internet, print, and point of purchase displays. Since the target consumer is constantly on-the-go and visiting the counters and pro stores, the media plan focused on these outlets will increase sales for M.A.C.
PRINT: M.A.C. will advertise within Vogue, Allure, and Glamour. These three magazines speak to fashion addicts, fashion forward women, people knowledgeable in pop culture of today, and trend setting individuals. Presentation of self reigns supreme in many of these readers mind. Knowing how to set themselves apart from others and become an individual in todayʼs world
through their appearance helps these women gain esteem and power within themselves to reach their goals. Appearance in not limited to clothing but to hair, makeup, and accessories. These magazines hone in on the trends emerging and focus on guiding women toward their achievable presentation of self. M.A.C.ʼs print advertisements will run over the course of a year and four times within each magazine. The ads will point towards seasonal makeup looks and products to get any women through the weather and apparel of that season.
VOGUE Media Kit: Advertise Seasonally, Four Times a Year Full color, Full Page Spreads $147,056 per print
ALLURE Media Kit: Advertise Seasonally, Four Times a Year Full color, Full Page Spreads $147,453 per print
GLAMOUR Media Kit: Advertise Seasonally, Four Times a Year Full color, Full Page Spreads $195,079 per print (See Media Schedule and Budget)
RADIO: The M.A.C. Radio plan will focus on Pop and Todayʼs music radio stations within large cities. Targeting large cities will directly penetrate the fashion and makeup industry. Our Target demographic tends to listen to pop music and follow the celebrities and their styles of todayʼs culture. Lady Gaga and Nicki Minaj are two of todayʼs most inspirational and followed artists of today and are featured throughout M.A.C. stores and poster spreads. Other consumers of M.A.C. also listen to indie/ alternative music and rock. 30 second radio spots of three highlighted stations will be produced and played on the stations year round.
LA’s KIIS 102.7: This Los Angeles Radio stationʼs focus is on the music and culture of today being directly in the center of the industry. Average of $1,000 per 30 second spot The ad will be featured four times a month 2 months out of the year
SF’s W ILD 94.9: This San Francisco station is the top pop station in the Bay area featuring hit music and entertainment news to itʼs listeners. Average of $800 per 30 second radio spot The ad will be featured four times a month 2 months out of the year
THE BEAT 94.5 Vancouver: The Top British Columbia pop station is geared to releasing the newest hit tracks and music of today. Since M.A.C. was founded in Canada we still want to hit this market throughout the media plan. Average of $500 per 30 second spot The ad will be featured four times a month 2 months out of the year
(See Media Schedule and Budget)
OUTDOOR: Outdoor advertising will be focused on large cities and metropolitan areas. Many M.A.C. consumers and professionals within the industry live in or near large cities. Majority of the target market of M.A.C. is constantly on the go and heavy into social media. Majority of the market is located in large cities and high-end locations around the world. Outdoor advertising will allow for M.A.C. to penetrate the market on a new level. Three key locations we will be placing the outdoor ads within are Los Angeles, San Francisco, and New York. These cities yield for the largest portion of the fashion and makeup industry within the United States. Featuring the ads will give larger brand awareness to the already existing brand status of M.A.C.
WALL SCAPE NEW YORK: The benefits of the wall scape outlet are that this medium accommodates creativity in a variety of sizes and shapes, creates a spectacle out of a building, delivers high frequency and reach, and show the dominance of M.A.C. within the market. Average of $200,000 per month Run eight months out of the year
SAN FRANCISCO TRANSIT SHELTER: Many San Franciscans use public transportation daily. The benefits of this medium include amazing visibility and quality impression within the glass case, delivers high circulation due to curbside positioning among roadsides, economical, and provide low cost impressions. Average of $600 per four-week course Runs for a month at a time out of six different locations around SF for a year
LOS ANGELES PREMIERE SQUARES: The benefits of this medium are that it offers the impact of a permanent bulletin and increases creative possibilities due to its size. The squares will be located to target our specific market segment. The premiere squares will be located in high-density areas within the city. Average of $400,000 per four-week course Run for eight months out of the year (See Media Schedule and Budget)
INTERNET: Makeup enthusiasts and consumers typically search the Internet for tutorials on makeup looks and new collections coming out through a cosmetics line. The M.A.C. consumer is also and the go and always searching the Internet gaining more information and inspiration through blogs in fashion and beauty. There is also a high search for foundation and cosmetic retailers. M.A.C. Cosmetics will advertise on fashion blogs and digital magazines utilizing banner and pop up ads. We will feature sponsorships and side bar advertising with links to M.A.C. on RICH SKINNY PRETTY. Com, which is a high-end, fashion blog site based out of LA where a large part of the industry and consumer market for M.A.C. is located. ELLE.com is a global style guide delivering fashion, beauty, style, service, and shopping in a quick and easy format. The Audience of ELLE consists of over 3 million consumers enthused about the fashion and beauty industry. THE CUT, based out of New York City, is a fashion blog site that allows is readers to view the latest fashion trends, read provocative takes on politics and relationships, plus get the insider look
on beauty trends and cosmetics. A Side Bar banner ad will be placed on this site with links to M.A.C. On top of these three sites, M.A.C. will follow Google ad words by using key words such as: PCP -MAC $1.14 -MAC make up $.046 -MAC Cosmetics $.40 -MAC Stores $0.73 -MAC Locations $0.80 -MAC Lipstick $0.79 -Eyeliner $1.46 -Eye makeup $2.09 -Foundation $2.43 -How to apply make up $2.32 -How to apply eye make up $2.33 -Make up Palette $1.41 -Brush Set $1.05 -MAC Brushes $0.70 -Best make up foundation $2.25 - MAC Pro Cosmetics $0.19 Each Month there will be a designated CPC of $50,000, this is included in overall budget of 1.7 million. M.A.C. will advertise on all three top sites six months out of the year and the budget will be evenly dispersed amongst the three sites. (See Media Schedule and Budget
DIRECT MAIL: MAC will be sending out direct mail pieces to large city areas on a seasonal basis. Each piece during the season to be released will feature certain products that are “must haves” during so. Example: Winter- Face Primer/ Moisturizing products Spring- Blush/ Bronzer Powders Summer- Eye Shadows/ Nail Polish Fall- Lip Stick/ Gloss Each mail piece will be a 5x7 full color front and black/white back postcard style. Lists from info USA have been comprised to M.A.C.ʼs specific target demographic. This target segment and release of mail pieces will generate at least a 2% response rate to MACCOSMETICS.com and overall revenue of the company products. Within the US 1,575,155 leads were found on info USA pertaining to strict demographic information of M.A.C. Consumers. We would use the mailing package, which includes: Name Address City State ZIP+4 Country
Metro Area Housing Info Carrier Route Delivery Pont Bar Code The Comprised lists that we have created total to $25,000 Rates and specs are derived from moderpostcard.com 5x7 Full Color Front/ Black White back Total of 40,000 to be ordered = $3,409 for the bulk To be released four months out of the year. (See Media Schedule and Budget)
TELEVISION: M.A.C. Cosmetics will advertise on E Network and NBC. The E Network is focused on providing Celebrity news and gossip as well as promoting new trends and music within their shows. M.A.C. will advertise during the hours of 7pm-11pm week nights. This is when the Network has the most traffic to their channel and our target demographic is tuned into the network. We will advertise on E due to the high release of Industry news and upcoming fashion statements according to the stars. Again, our market is focused on presentation of self and gains their knowledge of this from celebrities and industry employees. The ad will be a 30 second spot and run during the airtime of E News, which plays twice a night. The average of a 30 second spot during the news hour is $100,000. The ad will run on Wednesdays and Fridays for a five month period. MAC will advertise during a 30 second air spot on the NBC hit show The Voice, which air Mondays and Tuesday nights from 8-9pm. Ad costs for the spot will average $250,000. A large portion of our market is focused on watching this competition singing show and rooting for their favorite hopefuls alongside of their celebrity coaches. The ad will run Mondays and Tuesdays for a four month period. (See Media Schedule and Budget)
ALTERNATIVE MEDIA: M.A.C. will set up photo booths in malls and department stores that house M.A.C. Counters and Pro Stores. The Photo booth will take a picture of someone始s face and print out a blank face chart and a list of what products will be fit to use for the persons始 skin type. The list printed will be composed of colors and tones for their skin in range of M.A.C. products from foundation, powder, blush/bronzer, eye shadow shades, and lipstick/lip gloss shades. A photo booth will cost $8,275 each installment. There will be a total of 10 installments and they will travel to different locations in separate large cities for a time period of six months within a year. (See Media Schedule and Budget)
MAC GLOBAL: M.A.C. was founded in Canada and has grown to be a known worldwide cosmetic brand. The popularity of this brand and it始s products generates revenue for the company from countries all over the world. For MAC Global we will be focusing on the Canadian Malls from British Columbia and Quebec.
The British Columbian malls have and average annual visitation rate of 7 million. Within these malls there will be trumpet banners of 2ʼWx 7ʼH vinyl with printed images on both sides. These banners will cost an average of $1,000 per four-week installment. These will be displayed in each mall six times a year. Quebec malls have and annual average visitation rate of 13 million. Within the 5 malls across the area there will be mall exterior banner of 12ʼW x16ʼH. These will be able to gain the attention of mall goers before they even enter the buildings. Also within the malls will be posters sized 4ʼWx 6ʼH to remind the consumers to visit the M.A.C. counters. Per four-week installment for the poster ranges from $1,300 for each backlit display and the exterior banner per unit is $1,950. These banners and displays will be running in sync with each other six months out of the year; a month at a time. (See Media Schedule and Budget)
POINT OF PURCHASE DISPLAY: There will be product displays at each M.A.C. counter and pro store located near the entrance of the store. The product displays will focus on seasonal items that coincide with the seasonal media campaign. The products will cycle throughout the four seasons including foundation, eye shadows, lipsticks, and blush/bronzers. The displays will focus on the needs of your skin for that season. There are 4,000 MAC Stores within the United States and each display will cost $500. The displays are reusable throughout the year. (See Media Schedule and Budget)