MAC (Makeup Art Cosmetics) is originally a Canadian company that has been operating for more than 20 years and it has already penetrate to many countries all around the world, in the North and South America at most. It sells brand cosmetics of high quality that is intended for professional as well as everyday usage. The brand is sought-after also by many celebrities, fashion models, and photographers because of its delicate texture, huge choice of colors, and durability. The products are usually very well tolerated on every skin type and MAC make-up items are also suitable for women with sensitive eyes. The prices of the MAC cosmetics are comparable with other high quality world brands, i.e. those which cannot be bought in drugstores, but in the specialized cosmetic stores or international perfumeries that the company has a contract with. That hinders the company from further expansion into other countries, mainly in Central and Eastern Europe, because of the limited ways of sale. In the recent years, MAC has slowed down its spreading out around Europe and does not intend any sale strategy changes or new retail sale contracts. Since there is no online sale through Internet outside the United States, Central and East Europeans have no possibility to buy the MAC cosmetics except traveling for it abroad.
Additionally, weak promotion causes awareness decline and lower sales for the last year. The company uses celebrities (actress, singers) as representatives or models. However, there is lack of advertisements and promotional campaigns that would attract ordinary women to try the brand make-up. Recent slow expansion of the company is caused mainly by the limited ways of sale and by the worries about the loss of control in the case of penetrating new markets. The company does not think about any other practices than retail contract sales and refuse the offers from abroad to get MAC products in there. “The demand for MAC Cosmetics is there, but the supply is not. While MAC is one the cosmetic lines highest in demand, finding discounted products is actually not that easy” Moreover, there are no media advertisement outside the United States and people often do not even know about the products and their advantages. The statistics show that the leading way to get information about MAC products is via referrals.
Since there is a lack of promotional campaigns with no free samples, the company can only rely on the existing customers to spread the information about MAC products. There are several alternatives how MAC can penetrate new markets, mainly Central and East Europe and also how to make people more aware of its high-quality cosmetics. It is good to consider different ways of the sale strategy, such as exporting, franchising, or retail sale via contracted distributors. First alternative that can help the company to get its products further abroad is exporting. Exporting can be performed by the company itself or it is sometimes good to use export agents that work as intermediaries between the company’s home country and the foreign country (or even more foreign countries) to which the company wants to export its products. MAC can benefit from exporting because of getting its products everywhere at relatively low costs. The products can be distributed by external intermediaries and sell at the worldwide markets without any direct involvement of the company.
However, it requires several adjustments of the products to be made by the company itself, such as packaging, and some other modifications that would suit to different nations. Also, there can be some administrative obstacles that the company has to solve in order to make good agreements with the distributors. On the other hand, exporting can provide international awareness of the brand connected with the desire to innovate even more. The threats that can occur in the case of exporting can actually occur also in other ways of marketing practices, that is tough competition or political and economical impediments that make the product offering harder and more costly Second alternative in order to reach new markets is franchising. Franchising is one of the most widespread forms of cooperation between companies all around the world. A franchisor is the founder of the whole system and represents a core for the whole network of franchisees. The parent company develops and manages the conditions at which the franchisees function and actually sells its business objective. In the chain of franchisees, each one is an independent business unit but its operation is partially controlled and limited by the parent company’s marketing conception.
Therefore, franchising provide both advantages and disadvantages for the franchisor as well as for a franchisee. One of the greatest advantages of franchising is money inflow from the franchisees, which pay for the right to sell the MAC products, for the brand name, and know-how. Beside that, the company can rely on the local people that know the local market and can apply or adjust the original marketing strategies directly to the local customers. That can bring new innovative ideas and suggestions for modification in order to fit the products to the local market. However, there is a possibility of failing in the case of application the strategies that arose somewhere else in the world. There can be present low flexibility while communicating on the long distances and also higher initial cost for training the employees and make them do what the parent company wants. If the local company does not fulfill the requirements settled in the franchising agreement, it can threaten the company’s reputation even on the international level.
Also, it is inevitable to consider the cultural differences and adjust the products as much as possible to those different needs and habits. Third alternative is to stay with the actual system, so to distribute the products via contracted international perfumeries or own stores managed from the central office, but bring a new promotional strategy that can also help to penetrate new markets and also increase sales in the existing markets. The new promotional strategies can provide not only reaching new markets and spreading out the awareness of the MAC products but also it can significantly help to increase sales and revenues. Since the stores are the company’s ownership, and also most of the employees or at least branch managers are directly from the central office, there is a huge control of prescribed marketing practices and not much space to break the regulations. Recently, advertising is an inevitable part of sale and do the promotion only through celebrities and models is not enough.
People cannot know much about the product quality without interactive campaigns and free samples that they can try and make their own opinion about MAC cosmetics. No doubt, advertising is not a cheap matter and careful budget planning is inevitable but the costs can be paid back soon by the increased sales. Of course, growing competition or public glut for advertisements can threaten the sales and the company’s success but it would be pointed on the whole market, not just one single company. After consideration of all the above-mentioned arguments, MAC should apply the third alternative, so to continue contracted distribution of the products, but develop a completely new promotional strategy. First of all, the company should “determine the target audience” in order to know how to focus the promotions .Although MAC´s motto is “All races, all sexes, all ages”, it would be better to focus the promotions to women, especially younger women who can be the largest group of potential customers. Also, young and middle-aged women more inclined toward different colors and are likely to experience new textures and overall makeup. Second, it is needed to “determine campaign objectives”, so to make a research about the local market and settle the goals that should be fulfilled by the campaigns.
The extent of the campaign is also determined and is influenced by the budget amount, so how much financial resources can be used for the promotions. It must be carefully planned and adjusted to the company’s abilities. In the case of cosmetics, the best “media strategy” is to organize interactive meetings, workshops, and free samples distribution. Women can try the products by themselves and find out their high quality. Also, advertisements in the female magazines are a good way to make women aware of the MAC brand. It is a well-known fact that women are willing to pay large amount of money for cosmetics if it is worth, so even the higher prices of MAC cosmetics are not an obstacle in increasing sales and attracting new customers. MAC should use some successful promotional agency for the campaign conduct. The agencies have the experiences and skills to prepare a high-quality campaign even on the international level. The company itself would not be able to manage all the important things that an international promotional campaign requires.
The financial resources invested to the campaign can be quickly returned by higher sales and more customers attracted by the promotion. Success of the new promotional strategy can be measured by several techniques. For example, “pre-testing of copy appeal and brand recognition, post-testing of product or brand recognition, and measuring campaign’s impact on sales” . It is a very good measurement to compare the sales before and after the new strategy application. Additionally, increasing sales and increasing number of regular customers are good signs of the successful campaign. Public awareness of the MAC products can be also measured by the questionnaires and randomly asked questions in the streets or beauty salons. Properly planned and conducted promotional campaign will certainly help the company to get to the European markets and increase public awareness of the MAC products.