iyeh_mkt321_final_benefit_cosmetics.pdf

8/9/2019 IYeh_mkt321_Final_Benefit_Cosmetics.pdf

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Executive Summary This is a geo-targeted direct marketing plan for Benefit’s Brow Bar services in

San Francisco.

This campaign will introduce the Brow Bar Gorgeous Rewards mobile

application, which will be developed for this program. It will function as a loyalty card, a

distribution system for offers and a quick and easy way for customers to make beauty

appointments at their preferred Brow Bar location. This direct marketing plan has two

main goals, new customer acquisition and customer retention through the use of house

mailing lists, advertising and guerilla marketing in the city of San Francisco.

The campaign will come in four phases throughout the course of a year. Each

channel will launch during the beginning of the phase. Then, each channel will cycle

through each touch point, from first touch point (communication about the offer) to

second touch point (follow-up about the offer if no response).

The specific channels included in this plan are: direct mail, email, direct response

radio, social media, and flyers. For each media channel, we will provide a 20% discount

for new users and reward points for existing users through the mobile application to

redeem for products and beauty services each time a Gorgeous Rewards customer

gets a brow service at one of our locations. This will continue to drive customers to the

store, keep customer retention, grow customer loyalty, and encourage consumption of

both Benefit’s products and its services.

We will continuously check outcomes and monitor our KPI’s to ensure that our

campaign is performing efficiently and we are getting the highest ROI.

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Executive Summary 2

Introduction

4

Company Background 4

Situation Analysis 4 Marketplace Macro-Environment

4

Competitive Situation 5

Product Situation and Positioning

6

Research Results

6

SWOT Analysis for Brow Bar (See Exhibit 4)

9

Goals and Objectives 9

Marketing Strategy 10 Target Market

10

Positioning

10

Offers 11

Direct Marketing Tactics 12 Media Channels

12

Database Development

15

Testing

15

Fulfillment and Service

16

Coordination and Integration with Other Channels

16

Implementation Timetable of the Program 16

Budgets and Financial Information 18 P&L

19

Customer Lifetime Value (CLTV) 20

Evaluation Rules and Methods

21

Conclusion 22

Appendix 22

References 32

3

TABLE OF CONTENT


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Introduction We have been hired as outside consultants to create a direct marketing plan for

Benefit Cosmetics’ six San Francisco, California brow and beauty bar locations. We

analyzed industry trends, found primary and secondary research, and recommended a

direct marketing strategy and tactics that will help promote Benefit’s Brow Bar and

beauty services, increase store traffic, gain new customers, and grow customer loyalty.

Company Background

Benefit Cosmetics LLC is a cosmetics manufacturer, which was established in

1976 in San Francisco, California. The company has various product lines including

makeup, skincare and beauty services. The company provides their services at over2,000 locations in more than 30 countries. After the successful growth in the U.S.

market, the company expanded their brand to London in 1997 and the company was

acquired by LVMH in 1999 (Benefit Cosmetics About Us Page, 2014).

Situation Analysis

Marketplace Macro-Environment

The cosmetic and beauty industry has $52 billion in total revenue and the annual

growth is 4.9 percent each year from 2009 to 2014. It is expected to remain the same

percentage until 2019 (Phillips, 2014). The revenue of the industry decreased 27

percent in 2009 because of the recession. However, the revenue has slowly increased

and it grew to $52.3 billion in 2014. According to the GMID industry report (2014),

Benefit Cosmetics, LLC occupies one percent market share in the U.S. cosmetics

market.

The department store is a common distribution channel in the cosmetics industry.

Many cosmetic products are sold in department stores, though this has been changing

in the last five years (Phillips, 2014). The online platform has become one of the most

popular shopping channels as well because it allows the brand to sell directly to the

consumer rather than going through a distributor. Consumers can not only go to the

physical stores to make the purchase, but can also place their orders online. Online

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cosmetics shoppers generated more than seven billion dollars in 2010 and this group is

estimated to grow steadily in the future (Schulz, n.d.).

Competitive Situation

Benefit Cosmetics uses a unique business strategy in the prestige makeupindustry. Unlike many prestige makeup brands, which distribute products through

department stores such as Nordstrom, Macy’s, or stores like Sephora or Ulta, Benefit

sells directly to the consumer (Phillips, 2014). The Benefit Cosmetics stores sell only

their brand. In addition to their products, they sell beauty services, from eyebrow

waxing, to eyebrow tweezing, to bikini wax, to spray tanning: they offer an array of

options.

Our plan is to promote the Benefit Brow Bar and Boutiques beauty serviceswithin the Benefit stores. These stores are heavily dependent on local traffic, so we

chose to focus our direct marketing analysis and strategy on locations in San Francisco,

California. There are six Benefit Cosmetics store locations in San Francisco offering

Brow Bar or beauty services. One of Benefit’s closest competitors in San Francisco is

Anastasia Beverly Hills, located in Nordstrom’s Market Street location in San Francisco.

Anastasia offers a full brow service complete with brow arching, brow re-shaping and

sculpting as well as facial waxing. Much like Benefit, Anastasia offers a line of brow

products, which are promoted and sold through this beauty service (Tiffany, 2014).

While Anastasia is the closest competitor in the level of service and products,

there are many options to wax, color, or reshape one’s eyebrows in the San Francisco

area. A search for “brow bar” near Sutter Street in San Francisco reveals several

locations for Benefit, Anastasia and Wax Addict, a brow service owned by a former

Benefit Brow Bar expert. The latter company boasts five stars for the service out of 41

reviews.

In addition to these high-end services, independent salons that offer waxing

services present competition for Benefit Cosmetics’ Brow Bar. A search on Yelp using

the keyword phrase “waxing eyebrows” reveals 973 results (including Benefit’s Brow

Bars) in San Francisco, California. The results include day spas, nail salons, hair

salons, and cosmetic and beauty supply shops (Yelp, 2014).

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Another form of competition for brow services is a recent phenomenon called

eyebrow threading. Said to originate from India, threading “involves rolling a twisted

cotton thread over unruly hairs then removing them at the follicle level,” (Starzee, 2009)

and has increased in popularity in the US over the last decade. It works well for

sensitive skin and unlike tweezing, can remove rows of hairs at a time. The Shapes

Brow Bar uses this method in malls in seven states and one of the owners of the

franchise calls it “the McDonalds of the beauty industry,” (Starzee, 2009). While there

are no Shapes Brow Bar locations in San Francisco, this franchise has contributed to

awareness about the threading technique as a result of its prominent locations in the

public areas of malls. A Yelp search with the keyword phrase “brow threading” reveals

234 search results in San Francisco, California. Upon closer inspection, however, it was

difficult to find a location that actually offered the service, but many of the Yelp reviewers

mentioned that they had had the service at one point. In a phone call with a

representative from Urban Beauty Spa, located at 130 Bush St, 4th Fl, San Francisco,

CA 94104 and offering threading services, we found that the threading service costs

$22 and eyebrow waxing costs $18 (See Exhibit 1).

Product Situation and Positioning

Benefit Cosmetics advocates that laughter is the best cosmetic, and that makeup

doesn't have to be serious to look good. Benefit products include makeup for the face,

cheeks, eyes, lips and accessories. The company builds the brand image through

creative packaging, unique product names, and unique services, such as the Brow Bar.

Benefit Cosmetics creates witty, cute and funny taglines for all their products.

Research Results

• Primary Research Results (See Exhibit 5)

Primary research was conducted in the form of a survey about Salon Services

using SurveyMonkey. The main objective of this primary research was to examine

customers’ buying behaviors and direct marketing methods. In total, we obtained 61

respondents who are females and live in San Francisco. Below are our survey results.

• 86.67% respondents use salon services such as: Brow Bars, Nail Salons,

and Waxing.

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• The reasons of respondents use these services instead of doing it

yourself

- Improve your own skills: 3.27%

- Convenience:31.11%

- It makes you feel good: 27.86%

- Prefer professionals: 37.7%

• Age segments

- 18 to 24: 9.9%

- 25 to 34: 88.64%

- 35 to 44: 2.27

• The times of day respondents normally go get salon services

- 10am~12pm: 24.43%

- 12pm~2pm: 14.29%

- 2pm~4pm: 30.95%

- 4pm~6pm:35.71%

- 6pm~8pm: 47.62%

- 8pm~10pm: 7.14%

• Information acquisition channels

- Direct mail: 6.5%

- Email:14.75%

- Catalogs: 4.91%

- Magazines:11.47%

- In-store pick-up:26.22%

- Official website:36%

- Radio or TV:1.63%

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• 54.55% respondents look for promotions related to salon services

• Promotion acquisition channels

- Groupon

- Facebook

- Email

- Online search

- Living Social

- Magazine

• 54.67% respondents know Benefit Cosmetics in San Francisco offers a

Brow Bar service

• Eyebrows service satisfaction evaluation

- Price:44% respondents satisfied

- Service: 55.56% respondents satisfied

- Location: 44.44% respondents strongly satisfied

- Promotion: 77.78 respondents neither dissatisfied nor satisfied

• Secondary Research Results

The personal waxing and nail salons industry has $7.1 billion in revenue with an

annual projected growth of 3.9% from 2013-2018. There are no major players in this

industry and 7.3% of the service segmentation is waxing services.

There are currently an estimated 236,625 nail and waxing salons in the United

States. This figure represents average annual growth of 4.7% compared to five years

ago. The industry is highly fragmented; more than 99.0% of salons have just one

location (Phillips, 2014).

Disposable income and declining unemployment will continue to be the primary

drivers of this industry’s growth. Despite its discretionary nature, the industry grew

strongly in the face of the recession (Phillips, 2014).

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The personal waxing and nail salons industry is in the growth stage of its industry

life cycle. Although the industry’s service offering is well developed, lower price points

have engineered greater growth by expanding the industry’s target market (Phillips,

2014).

Our plan includes introducing a customer loyalty program through a mobile

application. According to the 2013 Research Alert Yearbook, the top motivations for

shopping via mobile include ease of use, seeing a mobile ad, finding the best deal, and

boredom of filling time (Research Alert Yearbook 2013, XII).

According to Javelin Strategy and Research, consumers spent $20.7 billion in

mobile purchases in 2012 and according to Comscore, almost two-thirds of smartphone

owners (65%) engage in shopping-related activities on their phones. (Research AlertYearbook 2013, 159).

SWOT Analysis for Brow Bar (See Exhibit 4)

Based on our SWOT analysis and research, we’d like to propose a customer

loyalty program that will increase the following:

Goals and Objectives

• New Customer Acquisition

• Customer Retention

Since Benefit Cosmetics has a unique business strategy that includes selling

their branded beauty products and services in the same locations, the company has a

great opportunity to use these different offerings to entice customers to come back for

more. The Brow Bar and Beauty Bars in particular offer services that are regular parts of

a woman’s maintenance routine on her appearance. We recommend that Benefit

develop a loyalty program for their beauty services, which would award points for repeat

visits, and which customers could redeem for services or beauty products. The Brow

Bar Gorgeous Rewards mobile application, which will be developed for this program,

functions as the loyalty card, a distribution system for offers and a quick and easy way

for customers to make beauty appointments at their preferred Brow Bar location. This

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direct marketing campaign has two main goals, new customer acquisition and customer

retention through the use of house mailing lists, advertising and guerilla marketing in the

city of San Francisco. Our key performance indicators for this campaign will be based

on new customer conversions to the Brow Bar and repeat visits. For new customer

conversions, our KPI is 1.5% and for repeat visits it’s 85% of the initial conversions.

Marketing Strategy

This campaign will drive traffic to the six Benefit Cosmetics locations, which have

Brow or Beauty Bars (see exhibit 8 for list of locations) using a 20% discount for a

customer’s first eyebrow service. The discount coupon will be awarded to the customer

via each media channel. Once the customer has redeemed the code in store, she will

be encouraged to download the mobile application. The app will then function as a

loyalty program and appointment system, keeping track of past and future appointments

as well as rewards points.

Target Market

Target Group Analysis (See Exhibition 3.)

As of 2012, there are 825,863 people in San Francisco, 405,499 of them women

(49%). 68% of the total population are above 18 and below 65, approximately half of

which are women. The approximate amount of women in this segment is approximately

268,405. Our target market has a high disposable income (yearly salary is over

$60,000)—which narrows our target market even more. The median income in San

Francisco is $73,000 so we are assuming that at least 100,000 women make enough

money to afford Benefit’s salon services (U.S. Census Bureau, 2012).

Positioning

Our target market for this campaign is a large age range, from 18-45, so they’ll

likely be responsive to a range of direct marketing channels including direct mail,

magazines, email, and TV/radio advertising. Benefit targets a more upscale customer—

women that like to look nice and are willing to spend money on products and services.

They are single or married, more affluent, and most likely enjoy things like shopping and

nail services.

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According to a survey of 500 U.S. women ages 18-34 taken by market-research

company Lab42, Beauty store owners and managers note that millennial women are

loyal to their favorite makeup brands. 68% say that they would opt for their preferredbrands over less expensive products. This is strength for Benefit because it’s a large

segment of their target market. This survey also noted that 42% of millennial women

follow beauty brands on social media and nearly half of them received a discount as a

result of following a brand. More followers leads to better customer retention, which is

important for Benefit and their customer loyalty program (Lab 42, 2014).

Offers

For each media channel, we will provide a 20% discount for new users andreward points to redeem for products and beauty services each time a Gorgeous

Rewards customer gets a brow service at one of our locations. This will continue to

drive customers to the store, keep customer retention, grow customer loyalty, and

encourage consumption of both Benefit’s products and its services.

• Creative Approach: Benefit Cosmetics has a very distinct look and feel. They use

different shades of pink, nude, black and white with retro style illustrations. Their

copy is clever, using rhyming and other literary devices, and stays true to theirmission statement that “laughter is the best cosmetic.” For example, on their

website, there are calls to action (CTA’s) such as “See how Benebabes wear their

faves,” and, “Nice Package! Build your own makeup kit.” The product names also

impart a humorous tone. For example, one of their beauty kits is called “Confessions

of a concealoholic” and their body balm is called "take a picture...it lasts longer..."

For each media channel, we will use these branding elements to create a consistent

look and feel for the campaign.

• Strategy: The messaging is based around the concept of “taking a brow break,”

meaning that we are encouraging working professional women in areas near Brow

Bars to take a break from work either during their lunch or after work, to get their

eyebrows shaped. See Exhibit 7 for an example of the direct mail flyer we would use

(See Exhibit 9 for cost breakdown).

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• Pricing: The pricing for the Brow Bar service is $20-$23 for a Brow Wax, $5-$6 for a

Brow Trim, and $12-$26 for a Brow Tweeze. The promotional discount of 20% would

be valid for the brow wax or brow tweeze only, since we’d like to encouragecustomers to get the full service and a trim is just an interim solution between

waxings. The pricing with the promotion would then be $16.67 to $19.17 for a

customer's first brow wax and $10-$21.67 for a customer's first brow tweeze.

Direct Marketing Tactics Media Channels

Direct Mail

The direct mail portion of the campaign will use Benefit’s house mailing list to

encourage current customers of Benefit products to use the Brow Bar services, which

they may not be aware of. The advantage of using the house list is that these customers

are already aware of Benefit as a prestige makeup brand and have indicated an interest

in Benefit’s products and services. They may not be aware of the Brow Bar and direct

mail postcards will drive interest and curiosity about the Brow Bar. Additionally, we

chose direct mail as one media channel option because it offers a potentially high

response rate, it’s a precise form of targeting, where we can personalize the mail

pieces. We will also use rental lists to reach new customers. The rental list we will be

using is called Beauty and Cosmetics Buyers List (See exhibit 9 for breakdown of

channel costs).

Email

Benefit Cosmetics sends product emails every 5-6 days, around the same time

every day, in the early morning. They’ve found this method successful likely because it’s

a weekly reminder about Benefit’s products and it comes in the early morning, when

women come into work or are on their way to work. Their emails have various

promotions as well - e.g. free samples with orders over $50. However, the Brow Bar can

use this method as well. Benefit wants to get customers into their store and the

objective of this campaign is to get them to come in for services during their lunch break

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or right after work. These are busy, young, working women that want an efficient, expert

service for their beauty needs. Also, this campaign is in the San Francisco Bay Area,

where people are fueled by technology and mobile. Everyone is always on their phone,

reading something and forwarding it to their friends. We will be using Benefit’s house list

(which encompasses product and services) to send the promotional emails. For the

house list, the goal is to cross-sell and get people interested in Benefit’s products to try

their Brow Bar services.

Despite the trend of sending these emails in the early morning (between 5 and 7

am on the west coast), we are going to do a split test to see the times that get the most

click-through rates. We want to test the time right before lunch, around 11 am, when

women want to take a break from work and can enjoy this unique and quick service.

The other time we want to look at is right before the work day is over, around 4 pm. This

could also be a quick reminder to women on their way out that they could stop by

Benefit and get their eyebrows done.

• Cost: $300 for the creative and no cost for the house list.

Flyers

Flyers are a traditional marketing strategy, a useful tool to communicate with

people and get them to come into the store. For example, a company can show theirname, logo, promotion and special design in order to attract people’s attention. In order

to communicate with our target audience, Benefit Cosmetics can distribute the flyers in

the financial area and downtown and near the other Benefit locations.

• Cost: The channel will cost $300 for creative and $103.95 per 1000 quantity of

flyers, as well as staff time for distribution.

Social media (Facebook, Twitter and YouTube)

Social media platforms have become an emerging digital channel, which

companies use to advertise their products and services. Among those social media

platforms, people use Facebook the most (66 percent), Youtube (28 percent) and

Twitter (25 percent) (Harland, 2014). Women tend to use social media platforms as their

tools while they research information about cosmetics, expert beauty suggestions,

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reviews and so forth. They also proactively look for a brand’s social media page while

they browse online (Lieberman, 2014).

Facebook

Women tend to use social media more often than men do. Among those socialmedia platforms, Facebook attracts more female users, 81 percent of respondents said

they have a Facebook account and 58 percent of them said they log into their account

more than once a day. Also, women get news from Facebook more than men do.The

company will post their promotion on their cosmetic related fan page in order to

maximize the efficiency of the advertising. The campaign can emphasize our promotion

on the ads “Eyebrow experts” in bold to attract prospects attention (Kaiserman, 2013).

• Cost: The company will run the campaign for 6 months with total cost $1,840($10/day) with potential reach of 176,000 circulation (Facebook, 2014).

Twitter

According to 2013 Social Media Demographics, it indicated that there are 18% of

women who use Twitter. Among those user groups, ages 18 to 29 account for 31% and

ages 30 to 49 account for 19% (Bennett, 2013). In order to maximize the efficiency of

their advertising, Benefit Cosmetics will also post their promotion on their Twitter page.

• Cost: Twitter will cost $2.50 to $4 per follower and $0.75 to 2.50 per click,

favorite, retweet or reply (SmartInsights, 2011).

YouTube

According to a 2014 Google YouTube Demographic Report, females account for

23 percent of YouTube’s most active users. Among those female users, 41% are ages

18 to 24, 26% are 25 to 34 and 11% are 35 to 44.

• Cost: We will advertise our campaign by setting the daily budget of $10 andmaximum cost-per-view (CPV) $0.05. This budget can help Benefit reach the

estimated 500 views a day.

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Direct Response Radio

Similar to other tactics, direct response radio has several advantages, such as

high reach, high targeting, and low cost (Brown L, 2013). The average listening time of

online radio listeners is 10 hours a week. In addition, direct response radio is highlymeasurable (Lowry T, 2009). Since the numbers of traditional radio listeners have

decreased in recent years, we would like to use internet radio, like Pandora as our

media channel. Pandora had more than 200 million registered users and 70 million

activated users in 2013 and 51% are females (Loeb S, 2013). Unlike traditional radio

stations, Pandora advertising can choose a specific target group for Benefit to

broadcast its advertising. However, we still have to make sure that the creative

approach, offers, and communication methods are attractive enough for our target

market. This direct response radio ad will be 15 seconds long and will focus on “taking a

brow break” and downloading the new mobile application, like in our other tactics. This

commercial should be simple and easy to grasp since our audiences will be listening to

music on Pandora and not paying a lot of attention to the short advertisements. First, we

have to identify the problem of not having groomed brows and offer our solution. For

example, we will identify customers’ potential problem, like “Do you have a wedding to

go to this summer?” Then, the commercial will offer a solution of “taking a brow break”

after work. The commercial should also emphasize Benefits Brow Bar’s advantages.

• Cost: According to the digital rate sheet (Pandora Advertising, 2012), we will

use Pandora’s Advertising system to place our advertisement. This costs $36

CPM plus $7 CPM for a select list (which includes :15 Web Audio, tile ad,

companion banner + geo +ZIP.)

Database Development

Testing

Each media channel will require testing to ensure the most impact and highest

response rate. There are numerous factors that we can test including the offer, copy,

design, the call to action, timing and the mailing list. With each new phase of the

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campaign, we’ll use the “beat the champion” rule by using the highest performing

version of the particular media piece and testing some new variation against it.

Benefit should analyze their current database to check if the click through rate of

the advertising in the social media platforms that the company posted their ads werehigh.

Fulfillment and Service

Customer Service: During the campaign phases, store managers will be required

to schedule extra Brow Bar experts and adjust staffing based on the amount of traffic

the store locations get.

Payment: Benefit Boutiques and Brow Bars have several payment options that

provide customers easy and convenient ways to make payments. Payment options

include cash, check or credit card. All the payment information will be saved in Benefit’s

CRM system for the loyalty program.

Customer service feedback: At the end of the service, customers will get a push

notification within the application asking them to rate the Brow Bar experts on a scale

from 1-5 stars, with 1 being the lowest and 5 being the highest. Benefit store managers

will read these excellent and poor reviews and help monitor staff so that staff is properly

trained and customers are happy.

Coordination and Integration with Other Channels

While sending email reminders to the customers or prospects, we can have our

Facebook and Twitter URL mentioned in the email as well so that customers that are

interested in social media will click on it and have another chance to find out about the

services offered. This strategy can also be applied to direct mail and flyers.

Implementation Timetable of the Program We are launching the campaign in four phases throughout the course of a year.

Each channel will launch during the beginning of the phase. Then, each channel will

cycle through each touch point, from first touch point (communication about the offer) to

second touch point (follow-up about the offer if no response). If a new customer

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schedules a brow appointment and uses the coupon, the customer will be encouraged

to use the loyalty program in the app to earn points. The communication for these

customers then changes to reminder emails, texts or in-app push notifications around

the time they should be scheduling their next appoint, which would be about once every

three weeks. (See Exhibit 6 for a diagram of the channel communication map.)

TABLE 1. IMPLEMENTATION TIMETABLE

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Budgets and Financial Information The budget allocation of this direct marketing campaign is based on response

rate, CPA, cost and analysis of the various media channels. According to our primary

and secondary research, we decided to allocate our marketing budget to direct mail,

email, social media, flyers, and internet radio. After we analyzed the cost breakdown,

we found that the rental lists and COGS affect whether or not our plan is the most

profitable. Since Benefit already has a strong customer base, we will take advantage of

existing client lists in order to reduce the marketing costs. In addition, direct email

generates the lowest CPA, which ultimately allows us to attract more customers.

Although social media has a lower response rate in our campaign, the high impressions

will help Benefit reach more potential customers. Flyers are an excellent channel toattract local clients into our stores. With guerilla marketing, we can explain our

campaign face to face with our target markets. The greatest drawback for using flyers

will be the labor cost because it will increase overhead cost. Therefore, we will hire

temporary workers to distribute half of the flyers, and the rest of flyers will be distributed

by Benefit employees in front of the stores.

Finally, since the numbers of traditional radio listeners have decreased recently,

we would like to use Pandora internet radio as our direct response radio channel. Themost significant advantage of Pandora internet radio is that we are allowed to broadcast

our advertising to our target markets. To sum up, the campaign’s average response rate

will be 1.5%. Based on our assumption of variable and fixed costs, we expect to make a

$35,259 profit in the first year. Our customer lifetime value will increase significantly in

the following year (Second year: $17.67, Third year: $28.49). The P&L and customer

lifetime value are listed below.

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P&L

Unit price: We use the average service price as our unit price which is $21.5 plus 20%

discount for the first year ($17.2).

S&H and COGS: Since our service does not require a shipping and handling fee, the

cost is $0. Our in-store employees are responsible for the Brow Bar service, so we only

estimate 15% of the COGS for the material costs and portion of employees’ salary.

Fulfillment & Bad debt: We used the industry average cost for fulfillment and bad debt.

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Customer Lifetime Value (CLTV)

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Retention rate: We assume our loyalty program will retain our customers efficiently. We

expect to reach 85% retention rate in the first year, 90% in the second year, and 95% in

the third year.

Response rate: We will offer the Gorgeous Rewards loyalty program once customersare acquired. We assume that customers who begin the loyalty program will continue to

buy our services. Therefore, the response rate for second and third year will be 100%.

We will remove or change status due to inactivity and non-response in order to increase

the response rate during the first year.

ROMI(Return on Marketing Investment):

ROMI = (Profit-Total Marketing Cost)/Total Marketing Cost*100%

The ROMI of our campaign in the first year will be -49%. When this campaign extends

to 3 three years, the ROMI will increase to 267%

Break-even (Net Sales = Variable Costs + Fixed Costs): Based on the break-even

analysis, we will have to sell 4314 units of Brow Bar service for this campaign in order to

have our revenues covering the cost.

Evaluation Rules and Methods

We will integrate our selected media channels in order to maximize the efficiency

of the campaign for the Brow Bar service. We will continuously check outcomes and

monitor our KPI’s to ensure that our campaign is performing efficiently and we are

getting the highest ROI.

• We will also use several measurement tools in order to find out how our campaign

performs with each media vehicle.

• We can conduct a survey with Benefit’s target audience asking from which

channel they heard about the Brow Bar.

• The company can also evaluate their sales numbers during the radio advertising

period to see if sales figure increase.

• The company will use the following methods in order to find out the value of the

online advertising (Digital Marketing NOW, n.d.).

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• Benefits Cosmetics will measure whether the traffic on their social media

increases.

Conclusion If the Gorgeous Rewards year-long campaign is successful, we will expect

Benefit to continue it to keep growing customer loyalty and increase sales.

Appendix

EXHIBIT 1: PRICE COMPARISON

EXHIBIT 2: INTERVIEW WITH BENEFIT MARKETING MARKETING MANAGER (VIALINKEDIN): JUN 16, 2014

Answer in bold.

RE: Benefit Cosmetics Marketing Plan

Annie Nguyen, Marketing Manager at Benefit Cosmetics

June 16, 2014 5:33 PM

Hi Marianna,

Thank you for reaching out. There is a lot of info that I can't share, but I answered to the

best of my abilities. See comments/answers below. Hope this helps!

On 6/8/14 7:42 PM, Marianna Levyash wrote:

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--------------------

Hi Annie,

I am a graduate student at Golden Gate University and am taking a Direct Marketing

and Database course, where one of our final projects is to do a direct mail marketingplan for a company that we choose to focus on. My group chose Benefit because we

are interested in the cosmetics industry and think the brand is great - we love the fun

creativity and Benefit products. I found you through our mutual LinkedIn connection

Antonina Belorusets and I was wondering if you could help me answer just a few

questions about Benefit, since it is a private company and not all of the information is

available. I will be happy to share everything we do with you and with Benefit Cosmetics

- our final proposal, plan, and presentation.

1. There are many cosmetic brands in the bay area - what makes Benefit Cosmetics

different and unique? Benefit is a brand that truly believes a woman is the prettiest

when she's happy & laughing. All of our products are know to deliver quick,

instant beauty solutions. Unlike all other makeup brands, each of our products

also have a story & personality of our own.

2. Which direct mail marketing campaigns are you currently running? What is working

and what is not? Benefit leverages our retail partners to run our direct mailmarketing. In the US, we no longer mail our print catalog. The catalogs are still

available, but distributed at our points of distribution instead. It's a bit

challenging to track the results from our direct mail pieces as not all our retail

channels are willing to share the information with us as we leverage their

customer database. In the past, anecdotal data has shown that our direct mail

pieces have about a 1.5 - 3% return rate.

3. How does your organization measure campaign outcomes? It depends on thecampaign. KPIs can include: Sales results, social engagement & reach.

4. Is there a set marketing budget for 2015? What is the likely budget allocation? (We

don't need exact numbers - just a range is fine) There are 2 US Marketing Teams. One

team is Retail Marketing (my team) and the other is Brand Marketing. Retail

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Marketing focuses on initiatives that have a strong retail influence (i.e. retail

partnerships, in-store events). Brand Marketing's initiatives have a much wider

reach (i.e. Project Runway presents Under the Gunn partnership. As a result, it's

difficult for me to provide even a budget range for you to reference.

5. How frequently do you communicate with members? We interact with our

customers on a daily basis through our social media channels.

6. Are there annual events you focus your marketing efforts on? Benefit will also do a

strong focus on our Star Products: They're Real & the POREfessional. Annually,

we hold 600+ events in our retail channels. In addition to our Star Product Events,

we also hold events for our new product launches & free brow services as well.

Exhibit 3. San Francisco Demographics

(U.S. Census Bureau, 2012)

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Exhibit 4: SWOT Analysis- Benefit’s Brow Bar

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Exhibit 5: Survey Questions (via SurveyMonkey.com)

1. Do you use salon services such as: Brow Bars, Nail Salons, and Waxing?

Yes

No

2. Why do you use these services instead of doing it yourself?

Improve your own skills

Convenience

It makes you feel good

Prefer professionals

3. What is your age

18 to 24

25 to 34

35 to 44

45 to 54

4. What times of day do you normally go get salon services?

10am~12pm

12pm~2pm

2pm~4pm

4pm~6pm

6pm~8pm

8pm~10pm

5. Where do you get information about salon services?

Direct mail

Email

Catalogs

Magazines

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In-store pick-up

Official website

Radio or TV

6. Do you look for promotions related to salon services?

Yes

No

7. Where do you find these promotions? Please answer below. (Facebook,

Twitter, Email, Direct Mail, Magazines, Etc.)

8. Did you know Benefit Cosmetics in San Francisco offers a Brow Bar

service?

Yes

No

9. If you have gotten your eyebrows done at Benefit's Brow Bar, how would

you rate your experience at the store (From 1-5) (If not, leave blank)

Price

Service

Location

Promotion

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Exhibition 6: Direct Marketing Channel Map

28

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788%, 1%9(2-%,

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Exhibition 7: Sample Email and Flyers

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Exhibit 8: Benefit Boutique and Brow Bar Locations

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Exhibit 9: Media Plan

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References

Annie Nguyen, Personal Communication (via LinkedIn) Benefit Marketing Manager

June 16, 2014

Benefit Cosmetics About Us Page Retrieved June 15, 2014 from: http://

www.benefitcosmetics.com/brand/aboutus/aboutusoverview

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2013 Social Media Demographics. Retrieved July 7, 2014 from http://

www.mediabistro.com/

Brown, L.(October 20, 2013). Pandora takes aim at local radio advertisers. Retrievedfrom http://www.stltoday.com/business/local/pandora-takes-aim-at-local-radio-

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Chaffey, D. (2011, December 13). Twitter advertising campaign costs. Retrieved July 13,

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support.google.com/youtube/answer/1715072?hl=en

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Digital Marketing NOW. (n.d.). Measuring Online Advertising Effectiveness. Retrieved

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GMID (2014). Benefits Cosmetic. Global Marketing Information Database (GMID).

Retrieved from http://rdl.lib.uconn.edu/databases/1114

Harland, B. (2014 June). Social Networking- US. Mintel. Retrieved from http://

www.mintel.com/

Kaiserman, R. (2013 February 12). Reaching Women through Social Media. Retrieved

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Lieberman, G. (2014 July). Color Cosmetics- US. Mintel. Retrieved from http://

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Lowrt, T.(2009). Pandora: Unleashing mobile phone ads. Retrieved from

http://www.businessweek.com/magazine/content/09_22/b4133052597112.htm

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vator.tv/news/2013-12-21-how-does-pandora-make-money

Market Research Blog, Infographics, Custom Research News | Lab42 -. (2014, August

4). Retrieved August 5, 2014 from blog.lab42.com

Pandora advertising. Products & Specs. Retrieved from http://advertising.pandora.com/

products-specs/

Phillips, J. (2014 April). Cosmetic and Beauty Products Manufacturing in the US. I

BISWorld. Retrieved from http://www.ibisworld.com/

Research Alert Yearbook: Year in Review. (Vol. 2013 Edition). (2013). New York: EPM

Communications.

Salon Services Survey, https://www.surveymonkey.com/s/D3BYQN7 (Last visited

August 8. 2014)

Starzee, Bernadette. (2009) Shaping a New Industry, One Brow at a Time.

Specialyretail.com. Retrieved from: http://specialtyretail.com/issue/2009/01/

retailer-profiles/entrepreneur-profiles/shapes_brow_bar_entrepreneur_profile/

#sthash.rd95U3hl.dpuf

Tiffany, Anastasia Brow Bar, personal communication, June 15, 2014.

U.S. Census Bureau, 2012 Retrieved from http://sfced.org/wp-content/uploads/

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iyeh_mkt321_final_benefit_cosmetics.pdf

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