Presentation by Chatsuree JarujetDimpi DoshiJennifer BonhommeKushan BanerjeeYing Ying Chiang

Date 2nd Mar. 2009

Boosting Brand Performance

Agenda

1. Establish Current Situation

2. From Brand Vision to Brand Evaluation- Brand Vision- Organizational Culture- Brand Objective- Auditing Brandsphere- Brand Essence

3. Big Ideas & Recommendations

The Numbers Revisited

Source: WSJ, 2009

Sales of Estee Lauder’s make up brandsfell 12% in 2008.

Estee Lauder plans to cut 2,000 jobs or 6% of its workforce over the next 2 years.

M.A.C’s parent company announced a 4 year cost-cutting strategy to reduce costs by up to $550 million.

Organizational Culture

Brand Objectives

Audit Brandsphere

Brand essence

Internal implementation

Brand Resources

Brand Vision

Brand Evaluation

Source: Chernatony, 2008

Brand Vision Envisioned future

A time when creativity and beauty rule for all ages, all races, all sexes.

Purpose To create confidence and celebrate

individuality through the MAC look

ValuesPlayful irreverence, cool confidence,

socially-aware

M.A.C Brand Culture Artefacts

Eye-catching, chic, stylish High profile backstage make up studio

Assumptions Fashion-lover

Cultural Values Elite equality

M.A.C Objectives

Consistently deliver trusted creativity

Staying ahead of fashion and trends

• Long term

• Short term

-Strong brand name 1 -R&D focus 1 -Customer concentration 1

M.A.C BrandsphereCorporation Distributors

Macro-Environment

Competitors

Consumers

-Strong distribution network 1

-WOM 1-Not as loyal in recession 0-Trusted make up experience 1

-Counterfeit 0 -Increase regulations 0-lower customer spending 0

-Intense, high switching 0-Value brands out performing premium 0

Source: Chernatony, 2008

Outrageous

Status

Bold

Standing out

Colourful

Trend-setting

In-the-know

Confident

Exclusive beauty

Trusted expertise

Individual

Suitability

Special

Personalized

Custom

M.A.C Brand Essence

http://www.maccosmetics.com.au/home.tmpl

http://www.maccosmetics.com.au/home.tmpl

Why M.A.C ?

Global recession

Same quality

Word-of-mouth Convenient

New markets

Good for travel

Strong R & DLower price point

New Markets for M.A.C

Youth Market Premium Savers

Switchers from Value

Balancing the investment vs. gains from different customers

Best customers

Lower your costs

Low

High

Low HighRevenue

Build revenue

Cos

t to

ser

ve c

usto

mer

s

Worst customers

Source: Piercy, 2000

Brand opportunities in a money & time constrained society

Charge for convenience

Justify price premium

Facilitate functional DIY

Low

High

Limited Plentiful

Time availability

Stress key benefit and VFM

Per

sona

l Dis

posa

ble

Inco

me

Source: Chernatony, 2008

Impact on Performance• Increase sales volume

• Increase revenue streams

• Decrease the feeling of vulnerability in a recession

• Address lower customer spending and frequency

• Acknowledge emotional needs, shows caring for customers

http://www.maccosmetics.com.au/home.tmpl

Why Create ?

MAC is for everyoneBrand co-creation Brand experience

Empowerment of consumer Customer’s creativityCustomer’s own positioning of attributes

Lower overhead cost online

Increase online presence

Impact on Performance• Encourage the consumer to become co-creator of the brand

and product.

• Enhance intimacy with the brand

• Boost customer spending on M.A.C. products, which will lead to higher sales revenue

• Pre-empt M.A.C customer to switch to competitors brands

Create your own

• Re-define premium status cosmetics for those willing to spend, balancing the value of M.A.C mini

M.A.C will allocate 5% of its 2008 sales to

and

Budget

Advertising &communication expense

Web design &managementR &D expense

Return of a 10 to 15% increase on performance

Additional RecommendationsExpand B.R.I.C. markets(Brazil, Russia, India, China markets)

Audit store performance & close low performing stores

Stratigically manage thetermination of relationships

Conduct workshops -to strengthen the brand purpose

Conclusion

M.A.C’s parent company, Estee Lauder, has experienced

declining sales and profitability due to the global recession.

By launching and Create , customers

will benefit from more affordable products while M.A.C

remains an elite, premium brand. This will improve

performance in sales volume while staying in line with the

brand values and purpose.

ReferencesByron, E. (2009) “Estee Lauder Profit Declines 30%” Wall Street Journal. [Online] Feb 6 p.B3

Estee Lauder, 2008. Annual Report 2008. [Online]

de Chernatony, L. (2006), From Brand Vision to brand Evaluation, Oxford: Elsevier

Ross, E. & Holland, A. (2007) “M.A.C Cosmetics - Two Franks are Better than One” The Cool Hunter. [Online] Apr 24

Sacks, D. (2007) “MAC Cosmetics” Fast Company. [Online] Dec 19

Wharton Business School, (2008) “MAC AIDS Fund’s Nancy Mahon: Tying the Cause to the Brand” Knowledge@Wharton. [Online] Oct 15

Wipperfurth, A. (2005) Brand Hijack: Marketing Without Marketing. Penguin, New York. p.101-108

Any questions?