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Listed below are the requirements for my paper. ?Can you please review to ensure that all requirements are met and the content correct. ?Please feel free to add anything additional that would enhance the paper. ?Thank you so much
Select an industry that interests you. Using the political, economic, social, technological, environmental, and legal (PESTEL) analysis as covered in the text, analyze the factors that may impact the industry that you have selected and the successful marketing of a company?s product. Evaluate the factors you perceive to be the biggest strengths and weaknesses. Describe some opportunities for growth that could be capitalized over the next five years.
Your paper must be a minimum of three to four pages (not including the title and reference pages) and be formatted according to APA style as outlined in the Ashford Writing Center. You must use at least three scholarly sources from the Ashford University Library, one of which must be peer reviewed, in addition to the textbook.
Must be three to four double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center.
Must include a separate title page with the following:
Title of paper
Course name and number
Must use at least three scholarly sources from the Ashford University Library, one of which must be peer reviewed, in addition to the textbook.
Must document all sources in APA style as outlined in the Ashford Writing Center.
Running Head: INDUSTRY FORECASTING
Cosmetics Industry Forecasting
BUS 620 Managerial Marketing
Instructor Susan Sasiadek
May 23, 2016
Cosmetics Industry Forecasting
The cosmetics industry has seen a huge increase in sales over the past six years. The
cosmetics industry does not only include makeup and many may think. It also includes nail
polish, skin care and fragrances for both men and women. The Drug Store News commissioned
consulting form Kline to compile sales and they found that cosmetics industry posted sales of
$36.5 billion in 2010 (Alexander, 2011). With the cosmetics industry covering several categories,
major brands such as MAC Cosmetics, Estee Lauder and Make Up Forever have offered
products in each category to gain brand loyalty to its customers. The factor that directly impacts
the cosmetics industry is economic factor. Economic factors make up a category of variables
that relate to the prevailing overall condition and health of the economy in which target markets
exist. (Finch, 2012).
The Factor that Impacts the Industry
As stated previously, the two factors that impact the cosmetics industry include economic
and social factors. Economic factors determine how much disposable income a customer has to
purchase luxury items. Although spending on most consumer products during the recent
recession has predictably declined, one class of products has fared unusually well: beauty
products (Schaefer, 2008). For instance, sales figures from one of the world?s biggest cosmetics
companies? L?Oreal ? showed that during 2008, a year when the rest of the economy was
suffering record declines in sales; they experienced sales growth of 5.3% (Elliot, 2008).
Although the country was in a recession, women still purchased cosmetics that made them feel
good about themselves.
MAC Cosmetics is one of the most respected, well-known and profitable companies in
the world. When MAC Cosmetics began in 1985 by Frank Toskan and Frank Angelo in Toronto,
the company was successful but did little advertising because of their budget. When the Estee
Lauder Companies took control of the company in 1998, the company was able to reach a larger
consumer market along with their core customers in the fashion industry. MAC Cosmetics sells
everything from eye shadows to lipsticks. One of the most successful and noticeable products is
Viva Glam lipstick where 100% of the selling price goes to men, women, and children loving
with or affected by HIV/AIDS. In fact, it?s the only product that MAC will advertise in
magazines and Viva Glam has its own spokesperson. The Viva Glam lipstick is advertised in
Allure, Cosmopolitan, and Vogue Magazines. The lipstick campaign has successfully raised over
$350 million according to the MAC AIDS Fund.
Strengths and Weaknesses
One of MAC?s biggest strengths is their popularity with celebrities and their back stage
presence during fashion week. Like many makeup companies, MAC gained recognition thanks
to one product, the lipstick. In the early 1990?s famous entertainer Madonna, told a reporter that
her favorite lipstick was MAC Ruby Woo, which caused all of her fans to purchase the lipstick
and increased the popularity of the cosmetics company. Another strength is free advertisement
with popular You Tube makeup tutorials from makeup artists, has placed MAC as a stable when
completing the perfect makeup looks. The company has become synonymous with selling
quality products at a reasonable price and is popular with professional makeup artists. With the
beauty industry increasing revenue, so have the competition in the industry.
Not only have makeup artists, such as Bobbi Brown Cosmetics started their own
cosmetics company but also popular celebrities such as Kylie Cosmetics Lip Kits by Kylie
Jenner. Celebrities have used their fan base to promote their cosmetics and have sold based on
the popularity of the product and not the quality of the product. Makeup trends change
constantly and MAC Cosmetics is slow with reacting to change. For instance, 2 years ago matte
lips became all the rage in magazines and with celebrities because of the long wear, opaque and
flat color finish. Through new technology advances in makeup lip matte colors gave a longer
wear than the traditional lipstick. Other companies such as Kylie Cosmetics and Jeffree Star
Cosmetics were quick to introduce liquid matte lipsticks and establish themselves among
customers. MAC was really slow to market a rival product and customers lost interest because
the lip trend began to change to a creamy finish instead.
In today?s market, social media plays a huge part of advertising products. Cosmetic
companies connect with customers using Instagram, You Tube and Facebook to introduce new
products and offer how to make up tutorials using their products. According to Kylie Jenner?s
Instagram page she currently has over 61.5 million followers to market her lipstick products to
while MAC Cosmetics only have 14 million. MAC has allowed other companies to have a
stronger marketing presence by not changing their advertising model. MAC has focused on their
core market of the fashion industry instead of the consumer market that purchases their products.
MAC has great growth potential in the consumer market by creating a market penetration
strategy using their social media and website appeal. Consumers today love ?how to? videos on
current and classic makeup trends and utilizing their social media followers to showcase makeup
looks during product launches would increase their appeal. Another way to utilize social media
is to sponsor established makeup artists who have over a million followers to showcase their
products during tutorials. This would allow their products to reach a customer that may not
know of their existence and increase cognitive learning by the viewer. Cognitive learning
describes an active learning process based on information processing within the mind of the
consumer and is typically prompted by the perceived need to make a decision (Finch, 2012).
When marketing products today, one of the least expensive ways to expand your market
is utilizing social media and websites. This type of marketing introduces the product and allows
potential customer to engage in product knowledge and drive them to purchase products. It?s
really important for companies to frequently conduct SWOT analysis to provide users with an
accurate and realistic assessment of the situation facing the firm with respect to a specific market
opportunity, enabling them to decide whether to proceed with the concept or abandon the plan
(Finch, 2012). Markets constantly change and companies must adapt to stay relevant in theor
Alexander, A. (2011, May 4). U.S. sales of cosmetics, toiletries rise above pre-recession levels.
Drug Store News .
Elliott, L. (2008, December,22) Intro the red "lipstick effect' reveals the true face of the
recession, The Guardian
Finch, J. (2012). Managerial Marketing. San Diego, CA: Bridgepoint.
Griskevicius, V & Millet, K. (2011, October 1)
Schaefer, K (2008, May 1) Hard times, but your lips look great. The New York Times.
Paper#9256570 | Written in 27-Jul-2016Price : $17.85