MARKETING STRATEGY FOR M.A.C COSMETICS

Marketing Strategy for M.A.C Cosmetics

Chelsea Elliott

Florida State University

2013

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MARKETING STRATEGY FOR M.A.C COSMETICS

Table of contents

Product and Competitive Environment………………………………………………….3

Marketing Objectives……………………………………………………………………5

Target Segment and Justification………………………………………………………..6

Media Resources and Strategy…………………………………………………………..7

Positioning and Message Strategy……………………………………………………....10

Test of Message and Media Approaches………………………………………………..12

Guidelines for Implementation……………………………………………………….....13

Evaluation of Effectiveness……………………………………………………………..14

Conclusion………………………………………………………………………………15

Works Cited……………………………………………………………………………..16

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MARKETING STRATEGY FOR M.A.C COSMETICS

Product and Competitive Environment

Makeup Art Cosmetics (also known as M.A.C) is a widely known make-up

company that was created in Canada in 1984. Since then, M.A.C has expanded its

company reach to more than 75 countries and territories with little to no advertising,

relying on endorsements and word-of-mouth. M.A.C, which was bought out by The

Estée Lauder Companies in 1998, has faced many challenges in its climb to the top. Not

only do they appeal to all ages and races with their wide range of colors to match every

skin tone, they also received controversy with adhering to all sexes. This opened many

doors for the transgender community and helped broaden their supporting market, but

casted a shadow over the markets that are becoming increasingly important, such as the

growing Hispanic market in the United States. According to the 2011 US Census Bureau,

Hispanics constitute 16.7 percent of the nation's total population, making Hispanics the

nation's largest ethnic or race minority. The increase in this market has caught the eye of

marketers, having Hispanic advertising surpass all other sectors of advertising, and

making it a more than $5 billion industry (AHAA, 2013).

Both Hispanic men and women value beauty, and according to Hispanic Retail

360, many Hispanics dress to the nines. This is especially important to the millennial age

group, (who overemphasize in apparel, fragrance, and cosmetics) making them feel the

need to get ahead and look good (Garbato, 2011). Hispanic women are an even rapid

growing part of the US population, creating more and more buzz for the $32 billion US

beauty industry. Cosmetics companies such as Suzi Q Cosmetics, Maybelline (the

number 1 selling mass market brand in the US), and Smashbox, have noted the

importance of this market and have since then conducted research studies and brand

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MARKETING STRATEGY FOR M.A.C COSMETICS

positioning to shine light on their products to Hispanic consumers. M.A.C Cosmetics

however, has acknowledged their lack of advertising in their approach to the top. This lag

will set them behind in their opportunity to successfully reach to the growing female

market.

The cosmetic companies that are thriving in the Hispanic market today are those

that are willingly spending money on Spanish-language media. According to the latest

report from Kantar Media, advertising dollars to Spanish-language television increased

17.8 percent during the second quarter of 2012 (AHAA, 2013). Companies like

Maybelline, and Suzi Q (a company created specifically with Hispanic women in mind)

have made their product packaging bilingual, advertised with relevant models, and

incorporated Latino endorsements. “L'Oreal, which owns Maybelline, has signed

multimillion-dollar contracts with Spanish actress Penelope Cruz and Mexican-American

actress Eva Longoria to represent their Hispanic beauty ideal” (Medina, 2007). Their

quick reaction to not only the growing Hispanic market, but also the increasing US

Hispanic women, has given them more revenue and recognition among Hispanic women,

setting the bar high for its competitors.

It is essential for a company as big and successful as M.A.C to place a greater

importance on the Hispanic market. M.A.C needs to focus on the Hispanic market by

gaining popular Latino celebrity endorsements, creating a collections specifically geared

towards Hispanic women and their skin tone, and spending ad money on Spanish-

language media. I believe, with proper research and brand positioning, M.A.C Cosmetics

has the capability to strive in the Hispanic market and further their global successes.

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MARKETING STRATEGY FOR M.A.C COSMETICS

Marketing Objectives

While researching the company, it became evident that M.A.C does not believe in

advertising themselves. The company relies on unconventional marketing, such as giving

away free products to make up-artists, photographers, and models, relying heavily on

word-of-mouth. M.A.C is also known for having celebrity endorsements for their Viva

Glam campaign that supports the M.A.C AIDS Fund. Celebrities such as Lady Gaga,

Cyndi Lauper, Elton John and Nicki Minaj (to name a few) create their own color

lipsticks and lip gloss from which the sale of every cent goes towards M.A.C’s personal

AIDS fund. So far, this has been a successful way for both celebrities and M.A.C to get

their name out there in the world of both pop culture and humanitarianism.

M.A.C also has a handful of collections that are continuously changing, bringing

in the attention of different ages, sexes and ethnicities. For example, right now they have

an “Archie’s Girls” collection, focusing on the colors and vibrancy between the constant

rivalry between Betty and Veronica, the “frenemies” from 1940’s comic book. This

attracted consumers such as my 52 year old mother, who, having vigorously read the

comic book series in her childhood, bought eye pencils and eye shadow pallets after

seeing the poster for the collection in a department store, simply because she could relate.

These seasonal collections have been an effective alternative to conventional advertising.

M.A.C’s “Archie’s Girls” Collection eye shadow pallet

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MARKETING STRATEGY FOR M.A.C COSMETICS

According to M.A.C’s parent company, Estée Lauder, 2012 annual report, “…we

[also] have the flexibility to quickly adapt to the fast-changing dynamics of the global

marketplace, giving us a strong competitive edge.” However, M.A.C still lacks in their

leap into the Hispanic Market. They don’t seem to have any clear objective for

advertising to this growing market, and since their general advertising is already vague,

adhering to the specific Hispanic market easily slips through the cracks. Since their

collections are not specific to regions (they are worldwide) M.A.C needs to amp up their

Hispanic flare and get the ball rolling on creating collections that gain the attention of US

Hispanic women.

Target Segment and Justification

As stated previously, Hispanic women are a rapidly growing bracket in the US

population. That being said, the suggested target market for this marketing strategy is the

Hispanic female millennials (18 to 29-year-olds). Hispanic millennials are the first

generation that is predominantly US born, and they very much embrace their Hispanic

culture. Marketers need to come up with creative ways to capture the attention of the

increasing demographic because 65 percent of US Hispanics are millennials, and over the

next few years Hispanics will account for more than 80 percent of the growth in the

overall population of 18 to 29-year olds (Villaneda, 2012).

The target market for most US make-up companies are women of all ages and

races, however, according to a research conducted by Mintel, Hispanic women feel

underrepresented in the beauty and personal care aisle (PRNewswire, 2012). It’s a known

fact that all women want to feel beautiful, so it is an important job as a cosmetics

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MARKETING STRATEGY FOR M.A.C COSMETICS

company to take advantage of the opportunities that can showcase and highlight the

different ways to help emphasize this beauty. For most young women, wearing make-up

is essential and most won’t leave the house without at least foundation on, making

cosmetics a daily part of any women’s life.

According to HispanicBusiness.com, “In recent market studies by Maybelline

New York, the company found that the average Hispanic woman buys more cosmetics

than her general market counterpart” (Medina, 2007). This is because Hispanic women

have placed a greater emphasis on the importance of how they look. These women

believe that the way you look outside reflects your inner beauty, and make-up is essential

in instilling confidence. These young women are daughters that were influenced by their

Hispanic mothers to take care of their skin and appearance, and also note that they, as

mothers, will influence their daughters to value their appearance as well (Mercedes,

2009).

Importance of Beauty to Latina Consumers

LATINAS NON-LATINASOuter beauty is a reflection of inner beauty

61% 42%

Importance of wearing make-up and looking good

69% 46%

Wear multiple products a day

81% 66%

Importance of looking better than friends when leaving house

40% 23%

SOURCE: Univision Communications Inc.

Media Resources and Strategy

As the growing number of Hispanic millennials increase, so does modern

technology. Over 60 percent of Hispanic millennials are online, and these tech-savvy

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MARKETING STRATEGY FOR M.A.C COSMETICS

individuals stay up-to-date with the latest fashions and trends by relying heavily on smart

phones, television, and social media. The need to stay current is part of being young for

any ethnicity, but Hispanics tend to over use more than the mainstream market. This

provides various ample opportunities for marketers to attract these consumers. In order

for M.A.C to get ahead, they need to invest time and money on relevant media outlets

that reach to this demographic.

For example, research shows that Hispanics watch TV about two more hours per

month than other groups, and millennial Hispanics watch both Spanish and English

networks. “We refer to them as ‘fusionistas.’ They see themselves as 100% Latino and

100% American. They're perfectly comfortable navigating both worlds. They have a

sense of pride from back home even if they're born in the US” (Wentz, 2011). Having

these young adults watch both Spanish and English networks virtually doubles the

opportunity companies are given to get their product heard. A good way for M.A.C to

make their product relevant with this age group is by creating TV ads that catch the eye

of these young, impressionable “fusionistas”. They can effectively do this by using

bilingual Hispanic actors to do the exact same commercial, spoken in both Spanish and

English, to be played on both networks. This redundancy will help with awareness and

also gain the trust of the influential market.

The Internet is another way to gain the attention of Hispanic millennials.

“Apparel, cosmetics, gaming, and pop culture are the online and mobile topics that draw

the most interest across all online and mobile formats for these consumers” (Garbato,

2011). Since this generation is centered around what they deem as “cool”, they use the

Internet to investigate up-and-coming trends. Many Hispanic millennials go online to

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MARKETING STRATEGY FOR M.A.C COSMETICS

research products, prices, and related trends prior to buying anything. M.A.C is already

ahead in this department because their website offers the option to view the content in

both Spanish and English. That includes prices, store locations, and an overview of their

current marketing collection and Viva Glam spokesperson.

However, in order to be effective in the Hispanic community, their collection and

Viva Glam endorsement needs to appeal to Hispanic women. For example, just as the

“Archie Girls” collection caught the eye of my mother, it would be effective if M.A.C

created a collection that catches the attention of Hispanic women. They could call a

collection “Mas Bellas” and have make-up pallets that are specific to the distinguished

skin tone of Latinas. Creating colors that compliment the different skin tones of Hispanic

women will also gain the attention of consumers who have Latin-like features but might

not be Hispanic themselves. This will attract different consumers in more than one

market and allow for more revenue. M.A.C should also get a popular Latino celebrity to

endorse their wildly popular Viva Glam campaign. A great spokesperson would be the

beautiful Sofia Vargara because her Hispanic fans have a more personal relationship.

Since the Columbian-born actress is also popular with the general population, this

endorsement would get the attention of Anglo consumers as well.

Magazines are another way young women keep in touch with basic trends, and

they are also popular among Hispanic millennials. Just last month Glamour magazine

launched Glam Belleza Latina, a new beauty magazine aimed at Hispanic women. The

magazine covers topics such as skin care and beauty tricks, and since Hispanic millennial

consumers are often navigating both English and Spanish-language media, the magazine

is written predominately in English, woven with some Spanish to appeal to these young

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MARKETING STRATEGY FOR M.A.C COSMETICS

Latinas. M.A.C would effectively get their name out there in the Hispanic community by

creating ads to use in print media, such as Glam Belleza Latina. They can use Latina

models to showcase their make-up, or even advertise “Mas Bellas”.

Positioning and Message Strategy

In order for M.A.C to successfully appeal to the Hispanic market, the company

needs to go above and beyond in understanding the likes, dislikes, and culture of this

demographic. Not just their Hispanic culture but also the American and technological

culture that inhabits all young people. The company needs to figure out a way to position

their product in such a way that gains the attention of Hispanic females without

neglecting their other consumers in different races and age groups. Basically, position the

product by gaining the attention of the general popular market (i.e. women) without

obviously zeroing in on one target market (Hispanic women).

In order to do this M.A.C needs to have a Viva Glam celebrity endorsement that

is favorable with the general public, as stated earlier. With that, they need to evaluate the

commonalities all women have. Already, the company prides itself on its broad selection

of foundations that are applicable to all ethnicities and skin tones. This is a great start-

they are able to gain the trust of all ethnicities and have the availability that competitor

companies might not have. This already gives them the edge they need to gain the

attention of the demanding market. Aside from that, M.A.C needs to go beyond just

creating colors that compliment Hispanic features, and investigate the type of products

the market is already using. This can be done by various interviews and focus groups. I

asked 10 interviewees what their preferred makeup brand was when they are getting

ready for an important event or a night on the town.

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MARKETING STRATEGY FOR M.A.C COSMETICS

Interviews: Favorite Makeup Brand (For going-out purposes)

1. Denise Malavé, 21, Venezuelan- Bobbi Brown

2. Barbi Sánchez Galeno, 18, Chilean- Smashbox

3. Cecilia Castañeda, 22, Chilean- M.A.C

4. Monica Gonzalez , 28, Mexican- Sephora

5. Haydee Galeno, 20, Columbian-Smashbox

6. Leilani Espinoza, 26, Chilean- Bobbi Brown

7. Vivi Leemhuis, 21, Cuban- Urban Decay

8. Jaqueline Manterola, 24, Ecuadoran- Smashbox

9. Cata Muñoz, 22, Mexican- Bobbi Brown

10. Lola del Canto, 19, Venezuelan- Smashbox

From my own personal interviews I have found that most Hispanic women prefer

quality make-up and are willing to spend extra money for it. Of the 10 millennials I

interviewed, all the make-ups are found in up scale department stores, and none of them

mentioned drug store make-up as their favorite. This showed me that Hispanic women

don’t put a price on beauty and even struggling college kids are willing to pay the extra

cash to have quality makeup. The most common among these young women was

Smashbox, followed by Bobbi Brown. Only one of the interviewee’s preferred M.A.C,

but this is not all bad news because it was still in the running next to all premiere brands.

The message that M.A.C will be sending to their Hispanic consumers is that they

are not a forgotten market. The company realizes that US Hispanic millennial women are

a growing market and values their opinion and satisfaction. Their message to these

women will be to feel comfortable in your own skin, proud of your heritage, and

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MARKETING STRATEGY FOR M.A.C COSMETICS

beautiful. Hopefully the Hispanic consumers will acknowledge and appreciate M.A.C’s

attempt to relate to them, and continue to not only purchase their products, but also

spread word on its quality.

Test of Message and Media Approaches

Focus groups are a crucial way to get unbiased and helpful insight into

determining the future success of a company’s marketing campaign. The company can

conduct these focus groups in two different ways: they can show the company logo on all

the mediums they present, or they can hide the logo. This gives the company a chance to

see where they rank in branding and also get genuine feedback from groups that don’t see

the logo, respectively.

In order for M.A.C to be successful in this they need to conduct multiple focus

groups that have a combination of Hispanic and Anglo consumers. This is important

because since they are a company with broad consumer markets, it’s crucial that one ad is

applicable to all the markets. They might show the integrated focus group a commercial

with a Hispanic female that is using the product with her Anglo friends, as they get ready

for a night out. They might also show print media with a mix of relevant models or

celebrity endorsements in the same picture. Within these focus groups it would be wise

for M.A.C to hand out questionnaires to it’s participants asking them questions about the

products they currently use on an everyday basis, whether it be face wash, lotion,

foundation, etc. Knowing these facts about each consumer can give the company insight

in the total care and necessities women look for in a product. M.A.C should also ask their

participants the type of social media they use the most: find out how they stay connected

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and what type of medium they prefer, whether that be TV, print, or radio. This can help

M.A.C find out which outlet has the most female following.

After conducting these focus groups and showing the participants their new

collections and Viva Glam campaign, it is important for M.A.C to ask the consumers

questions that can help modify their campaign to better effect their desired market. For

instance, they can ask the consumers if they could relate to the ads, or if they felt the ads

best represented what they already know about the product. The company could ask the

consumers the things that didn’t work, or maybe offended them, making it easier to

change their campaign and eliminate the future possibility of bad PR. They might also

ask the focus group for their insight on different ads that do catch their eye and

incorporate some of these ideas into their own campaign. With conducting the right

research and correct analysis of the focus groups it’s possible for M.A.C to come up with

a phenomenal way to showcase their products that can appeal to both Hispanic and non-

Hispanic consumers alike, increasing their sales and mainstream market.

Guidelines for Implementation

After compiling the research collected from the various focus groups conducted,

M.A.C will have a clearer picture on the best direction of their future campaign. Before

putting the entire campaign out there, it might be effective if M.A.C launched the new

marketing campaign in areas that have both high and low populations of Hispanic

women. This is where M.A.C can go back to it’s original style of unconventional

advertising by handing out samples to both people in the professional world of make-up

and Average Joe’s, allowing their products to speak for themselves through word-of-

mouth. Providing a few areas with the campaign and assortment of products will give

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M.A.C the opportunity to test the effectiveness of reaching both markets in one fell

swoop.

After a few months of allowing the campaign to cultivate, the company needs to

take in the sales results of those specific areas they targeted. After a thorough evaluation,

if there is a clear increase in revenue and consumer following, it means the campaign was

a success and it can be launched nationwide. If the campaign had some lags in revenue or

declines in consumer following, it’s back to the drawing board. M.A.C will need to

reevaluate the campaign and modify it so it’s more successful in the Hispanic market

place. This might mean conducting new focus groups showcasing the tailored campaign

and again redistributing it to areas to retest its efficiency. Hopefully with a successful

cycle of trial and error, M.A.C will perfect its campaign and send sales shooting upward.

Evaluation of Effectiveness

In order for M.A.C to evaluate how successful their campaign was, the company

needs to compare it to its past campaigns. M.A.C has had extreme success all over the

world, and their past marketing strategies have worked thus far. It would be wise for

M.A.C to compare and contrast the current campaign with previous successful ones to

rate the accomplishment of the new one.

M.A.C can also compare their new campaign to its competitors to evaluate how

they’ve done thus far. This can give them the push or pull they need to stay ahead of the

game. M.A.C needs to be constantly keeping up with the sales the campaign makes, the

moment they start noticing a decrease and it takes more money to run the campaign than

its bringing in, they need to pull it off the shelves and start all over from scratch. This

might mean conducting completely new research and focus groups to better adhere to the

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growing market. Going along with that, M.A.C needs to constantly be updating the

campaigns and researching this particular market. Sales will only take you so far, and

people and cultures are always changing. M.A.C needs to stay current with the latest

trends and fashions for all cultures since this is a worldwide company.

After the product has been out for quite some time, it might be valuable for

M.A.C to pull participants from the original focus groups to ask them new questions and

evaluate its effectiveness thus far. This will help the company stay on top. After thorough

research and comparative analysis with this market group M.A.C will hopefully have

positioned it’s product in the correct light that will help bring in a plethora of new

Hispanic consumers.

Conclusion

In conclusion, by M.A.C allowing themselves to spend ad money on different

medium, they give themselves the opportunity to be heard in a valuable, growing market.

However, positioning a product to shine light on a itself can only go so far because

ultimately the consumer has the power: not the advertising agencies, and not the

marketing department of companies that are trying to sell them products. Consumers

pretty much reject or accept things that they like. It is up to M.A.C to continue to create

good, sustainable, quality products that Hispanic women prefer against all other

companies.

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MARKETING STRATEGY FOR M.A.C COSMETICS

Works Cited

Garbato, Debby. “Hispanic Millennials: The Next Consumer Boom” Hispanic Retail 360. 2011. 29 March 2013 <http://www.hispanicretail360.com/article-hispanic_millennials__the_next_consumer_boom-2370.html>

Wentz, Laurel. “With an Ever-Growing Population of 'Fusionistas,' Consistency Is Key” Advertising Age. 2011. 29 March 2013 <http://adage.com/article/news/growing-population-fusionistas-makes-consistency-key/230390/>

Villaneda, Rebecca. “Hispanic Millennials--Who Are They?” Hispanic Business. 2012. 29 March 2013 <http://www.hispanicbusiness.com/2012/7/18/hispanic_millennialswho_are_they.htm>

“Hispanic Fast Facts” AHAA. 2013. 17 April 2013 <http://ahaa.org/default.asp?contentID=161#3>

“Hispanic Women Want Beauty Marketers to Speak Their Language, Reports Mintel” PRNewswire. 2012. 17 April 2013<http://www.prnewswire.com/news-releases/hispanic-women-want-beauty-marketers-to-speak-their-language-reports-mintel-96316814.html>

Mercedes, Rosemary. “Univision Releases New Research Showing the Importance of Beauty to Latina Consumers” Univision Communications Inc. 2009. 29 March 2013 <http://corporate.univision.com/2009/press/univision-releases-new-research-showing-the-importance-of-beauty-to-latina-consumers/#axzz2PiOmj0QK>

Medina, Hildy. “Made in the Shades” Hispanic Business. 2007. 29 March 2013 <http://www.hispanicbusiness.com/2007/5/4/made_in_the_shades.htm>

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