As you can see from this information Maybelline are constantly looking for new staff to help create innovative new products.
Validity of Market Research:
I can confirm that my questionnaire is valid; ways I did this was to ensure all the participants sat in isolation to ensure they were not influenced by anyone. This means that the questionnaires should theoretically be true. Another way I checked their validity was to return about a week, later and ask random questions from the questionnaire to participants to check their response remained the same and was correct. Furthermore to test the validity of my primary research I asked questions throughout the time the questionnaires were being completed, giving me a personal insight into each participant, and meaning that I could see if their responses were genuine.
The information I gathered from the internet was from the actual Maybelline website, suggesting therefore that the information on it would be valid and correct as it is a reputable secure source. On the other hand the information provided by Maybelline on their website is there to promote their products and so would not be likely to show the bad aspects of their products. On the whole I believe that the information I extracted from the website would be valid.
Another piece of primary research that I carried out was the test between trying out actual glittery/ plain nail varnish colours from Maybelline and having volunteers decide which they prefer. I found out the plain varnish was more popular. I know that this information is valid as I carried out the research personally and recorded the results myself in the table.
To find out which shops stock Maybelline products I first looked on the internet, then to make sure the information I gathered was correct I went into the shops to see if they actually had they products in stock. The following shops I found did have Maybelline products; Boots; Moss; Debenhams; Tesco; Sainsbury and Army and Navy. There are many internet companies which sell Maybelline these include E-bay Boots online, and Tesco online.
The Maybelline website gave me the prices of their products but to ensure the validity of this information I went into several of the shops which stock Maybelline to check if the prices matched those I found on the internet. They were all correct. This proves the validity of the secondary information I found out about prices from the internet. This also supports the validity of the website as a whole and makes it trustworthy. This supports my previous point.
I found that Maybelline promotes its product through, T.V adverts, Magazine adverts, Billboards, Sponsorship, The internet, Radio, Leaflets- discounts on products. I found this information by asking people as they were doing their questionnaires why, where and how they had of heard Maybelline. By asking a lot of people it gave me a good idea of where they advertise. I then looked out for Maybelline adverts and found the Magazine adverts, T.V adverts, Billboard adverts, the internet advertising and I heard their radio advert. This proves the validity of these aspects of advertising. Other ways of advertising, although I didn’t get first hand experience of them, I can be sure are valid as more than one person explained how they had seen the discount leaflets and seen their sponsorship taking place. The details they described corresponded accurately therefore validating them.
I tested the validity of the focus groups by returning and asking them similar questions from the week before to see if their answers matched those given previously. The all matched or were similar.
The text books I used during my secondary research were all valid and correct; I checked this by cross referencing one text book with another. Their names are in the bibliography.
There is no way I can be completely sure about whether the information collected from the internet is valid or not. I would say in the case of looking at Maybelline’s website that it is secure and valid because it is not trying too hard, furthermore there is no reason why Maybelline would have to produce fake information.
SWOT analysis:
This is a particularly useful approach when examining the relationship between an organisation, in this case Maybelline, and its marketing environment. The SWOT analysis focuses on the strengths, weaknesses, opportunities and threats facing a business or its products at any given moment. The internal elements focus on strengths and weaknesses of the organisation and the external elements look at opportunities and threats.
The SWOT analysis affects my marketing strategy’s internal environment through its strengths because Maybelline has a large number of branches selling their products globally; this means they are open to trade all over the world; Maybelline has large bases in New York and London. They have managed to develop international headquarters, thus making them a reputable company. Furthermore Maybelline is owned by L’Oreal. This is another large cosmetics company, with a good reputation, so together they make a substantial organisation. Maybelline has a vast range of products which are used by people of all ages. This means they have a large amount of potential customers. Due to these reasons, it would be fairly easy for the new product, Mood Varnish, to be introduced into Maybelline’s range. The above reasons also make it easier to promote the new product than if it were an unestablished company since customers using Maybelline will already trust that the product is likely to meet high standards. The price of the new varnish will need to fit in with Maybelline’s existing pricing scheme. For example, if it was priced at double that of the other varnishes, then customers would be wary of spending so much on a new product which they have not tried before. On the other hand, some weaknesses of Maybelline’s internal marketing strategy include the lack of men’s range. This limits the amount of custom they receive and the prices of Maybelline’s products are higher than that of store brand products. This could be argued that it is because the quality is better but one may find that teenagers would go for the cheaper option so as not to spend as much. There is no information about whether Maybelline test their products on animals or not. This could be seen as a weakness if they do, as other brands clearly state that they are against it, eg Body Shop. This would again limit the amount of potential customers as there is a following for the “Beauty Without Cruelty” brands. The above argument is the same with Maybelline as far as the recycling issue is concerned. Do Maybelline recycle? Although having a large range of products can be seen as a strength, it could also be seen as a weakness because customers may get confused about which products would best suit their needs. Maybelline have no main store – they sell their products through communes in individual stores or outlets and this may cause people not to come across all of the products Maybelline has to offer – this could be seen as a weakness.
The external elements of Maybelline’s marketing strategy include the opportunities for Maybelline – the obvious example is increasing their range and producing innovative new products. They could also create a new line such as beauty products for men, which may include moisturisers and other such products. They could also start the bath range, include shower gels and bath salts, or alternatively, Maybelline could make a fragrance line. A further opportunity facing Maybelline could be to open a shop exclusively for the sale of their own products, giving customers the chance to see the whole range displayed over a larger space and would be likely to bring in a lot of custom if the shop was situated in a big city, eg London. Some threats which face Maybelline are other companies introducing new products simultaneously, causing competition; the vast range of nail varnish already in the market; the price we would have to set the varnish at may be more than a regular nail varnish because of the technology needed to produce it and price cuts by other brands and lastly, the desirability of the product. For example, if it does not take off, prices would have to be dropped, causing a loss for Maybelline.
How the SWOT analysis relates to my marketing strategy.
PRODUCT: Maybelline is a globally known company, i.e. it is well known all over the world. Maybelline is owned by L’Oreal, a very well established company and together they make a substantial organisation with a vast range of products as individual organisations as well as together. This can be seen as a positive feature, for having such a vast range to choose from and it shows that they are innovative and creative to be able to produce so many different lines. However some people, for example the elderly, find the huge range too difficult to find what they need. If an elderly woman was looking for a lipstick, it would be good to have a large range of colours but the individual may be faced with the decision of ‘wet shine lip colour’ ‘wet shine diamonds gloss,’ ‘forever metallic lip colour pencil’ and others. This would mean that she might get confused and so try a different range with less choice. Should Maybelline increase their range? Yes, to attract the younger, more adventurous customers to look at their products and whilst doing this they are likely to buy other products. It is better for Maybelline to attract the younger generations because they are likely to continue buying Maybelline products if they find that they meet their requirements and this will enhance the company’s life. At present Maybelline does not have a range for men, which could be seen as a flaw because it limits the range of consumers. It would be wise to introduce some new ranges such as shower gels or bronzer for men; these are both ways of increasing their range of products and therefore increasing market share, an aim in my marketing strategy is to increase market share but I believe that mood varnish will do this without the help of a new range. Do Maybelline recycle and test their products on animals? These are questions that I have been unable to find the answer to in my research. If they do recycle and don’t test their products on animals it would be a good promotional strategy to show off this point in Mood Varnish because people who care about the environment and nature would buy this product over other products that clearly don’t recycle. On the other hand if Maybelline test their products on animals then it would be a good idea for them to keep it quiet.
PRICE: Maybelline is a reputable company which means they are able to price their products at what they feel is the correct price. They already have an existing pricing scheme, called skimming, where the price is set higher than it needs to be so that the company can make a profit whilst the new product is starting and sales are limited. The price will then be dropped as sales start increasing because the company will be making a profit. I will price my product at £5.99; this is the average price for a new nail varnish and so will fit in with the others. After the initial few months of sales the price will fall depending on the popularity of Mood Varnish. The skimming pricing scheme will only be successful if the new product is good. I think that Mood Varnish is a good product, will work well and gain customers quickly. People may be wary of spending more money on Maybelline’s products than store brand products. This could be seen as Maybelline being overpriced but as customers will see when they try the products, they are in fact receiving value for money.
PLACE: Maybelline is known as Maybelline New York but from my secondary research into Maybelline’s history I found that they now have Maybelline London; this means that they are globally renowned as they have made themselves big enough to have multiple international headquarters. It is a strange strategy for such a big company to not have a main store which only sells Maybelline products; they would receive a lot more custom and would be able to show off the products to their best if they had a main store. A threat facing PLACE may be other companies such as Revlon opening a brand store which would draw people’s attention away from Maybelline and their new product. To counter this, at the same time or just after Mood Varnish is released, a Maybelline London store will open.
PROMOTION: Maybelline is already a reputable company as I have said before, so not as much advertising is needed as it would if it were a new company. Maybelline has vast amounts of potential customers. It is through promotion, however, that they make these potential customers a reality. A way of making Mood Varnish stand out would be to create a ‘new look’ which involves introducing many new lines of products, such as a bath range, or a range for men. However, I don’t think that this would be a good way to promote Mood Varnish because is would take the attention away from the actual product and people would be focussing on their new ranges not new products. I do think however, that by opening Maybelline London, this will entice customers in and then they will be likely to see, test and buy mood varnish. The threat of other companies producing a similar product could be abolished by good promotion. As part of my promotion strategy Maybelline will be giving 50% off vouchers for Mood Varnish. This will again bring customers in. and help them stay ahead of the competition.
PEST analysis:
This is used to analyse the extended environment which is set out in the four sections. These are Political, Economic, Social and Technological. Within PEST, the key factors are identified. This is done so that the organisation can predict future events and as such, prepare for eventualities and try to stay ahead of the competition.
The Political section includes political stability, current monetary and fiscal policies and lastly, European standards.
Political stability would affect my marketing strategy because of several factors and these include where I would sell my product, Maybelline is an international company so this may not have as much effect as it would if it were national but there still may be political issues over where the product should be produced, where it should be exported to and other arguments such as those. Political stability may affect the price I set my product at. Depending on the Government, it may change quite considerably from country to country, due to the amount of VAT and import/export costs. Where I promote my new product depends on political factors and what the promotions include depend on European standards. Another factor affected by European standards is the actual product, Mood Varnish. It will need to be given the “all clear” by Trading Standards to ensure that the product does not contain anything which may harm consumers and if anything is likely to cause an allergic reaction, it must be stated clearly on the product so that if a consumer is harmed, Maybelline will not be held responsible. Maybelline does not have the problem of which currency to accept as it does not have an actual shop. If it did, it would have to decide whether to accept Euros or £ Stirling.
Within the economic section, we include unemployment figures, economic growth rates, inflationary figures, taxation imposed on the company, current interest rates and the exchange rate.
All of the above points affect where the product is made. For example, unemployment figures. If Britain had exceptionally high figures and America’s were average, then it would be logical to have the factories situated in Britain. However, this is not what happens because labour is expensive in First World countries, whilst in Third World countries, such as Asia, it is relatively cheap. The company is more likely to have their goods produced overseas and pay the importing costs. Where the product is produced will have an effect on the economic growth rate of the country it is being produced in. Inflation can cause many problems to the economy of a country and for individual organisations. If our prices are rising more quickly than those of our competitors Abroad, then we will rapidly become uncompetitive and our exports will fall. Inflation will also cause problems domestically as wages try to keep up and those on fixed incomes suffer. Peoples’ savings will also fall in value. If this happens on a big scale, people will be wary of spending their money on frivolous items such as nail varnish because they will need their money for other things, such as food! The level of the rate of interest is determined by the Monetary Policy Committee of the Bank of England that meets each month. If they decide to decrease interest rates then people may be more willing to spend frivolously, although this is not a major issue for Maybelline, as people would still buy the products if their prices don’t rise and interest rates remain the same.
Social factors of PEST are there to help a company find out what the needs of their clients are. They need to do this so to adapt to the needs of the market. The social factors section includes culture of the country, leisure availability, environmental factors, education and training standards, fashion and peoples’ lifestyles.
The culture of a particular country plays a big role in which items the cosmetics company will introduce into the market. For example, Maybelline is unlikely to introduce a nail varnish which purposefully smells bad and is a horrible colour because English culture would not accept this and there not use the product. Peoples’ lifestyles play a big part in where we would promote our product. We would look for patterns and then follow them with promotions to get the full benefit. Maybelline relates to the education and training standards because, theoretically, by people learning and getting better-paid jobs, they have more cash to be spending on products such as nail varnish. Environmental factors Maybelline must take into account include: where the promotion posters are placed; they cannot be endangering animals or making the environment we live in dirty.
The technological side is related to analysing materials at hand. For example, stronger or lighter materials than the previous. This section includes new products and processes, technological rate of change, consumer expectation of change and type of materials.
These things affect my marketing strategy because I have a new product coming on to the market, so to make it better than the rest, I will make it technologically advanced by using materials to make it have ultra-quick drying time, and the mood-changing materials. I believe that consumers would expect things from my product. These include durability, shine, colour-changing, smooth application and quick drying time.
How PEST affects my marketing strategy:
PRODUCT: in order for Mood Varnish to meet European Union (EU) standards it must clearly state if a product contains anything harmful to health, e.g. it must state that the product is for external use and should not be consumed. It should also say what to do if such things do happen, for example, seek help from a doctor. Or if it goes into eyes- flush with water. I will ensure that Mood Varnish has these warnings. The culture in which the product is circulating plays an important role in what standards the product must reach, for example some smells are good in some cultures whilst in others they are bad. So Maybelline would be making a mistake to produce a varnish that smells bad and is a horrible colour, looking at EU standards. I will make sure that Mood Varnish smells regular, if not good and that that the colour meets consumer standards. Furthermore Mood Varnish will be technologically advanced because customers will expect this. The consumers will be expecting durability, shine, vivid colour change, smooth application and fast drying time. Mood Varnish will meet all of these expectations.
PRICE: political stability is a key factor in determining the price of Mood Varnish as this affects the overall price due to amount of VAT added and import/ export costs. The Monetary Policy Committee decides on the rates on interest each month, this will affect how much cash individuals have to spend on frivolous things, such as nail varnish. A further factor affecting this is inflation. Where the product is produced is likely to affect the price because for example if it was produced in England or the USA then labour costs would be high whereas they are relatively cheap in Asian countries. This will affect the price because if Maybelline has to spend money on labour it may be harder for them to drop their prices and reflect good value to the customers. Relating to this are employment rates. If Maybelline had to produce their Mood Varnish in either the USA or England for technology’s sake then it would be beneficial to produce it in an area of low employment, which will make the government see that they are helping and will hopefully do something in return, like reduce VAT on the product being produced, for example. Mood Varnish will be produced in Singapore where costs are lower, thus reflecting on the overall price of the product.
PLACE: political stability again reflects in this element of my marketing strategy because of where it will be sold. If there was a feud between Britain and Ireland would the products still be allowed to be sold in Ireland? In the case of USA and Cuba, Maybelline products are not sold in Cuba because it is an American brand product. I found this information from a valid website. Where the product is made fits into this category. Mood Varnish will be made in Asia, thus helping unemployment issues there and helping to make them slightly more technologically advanced and broaden Maybelline’s global range of countries. Furthermore it will be cheaper in the long run to have Mood Varnish made in Singapore.
PROMOTION: promotion has to comply with EU standards, it must not contain anything that viewers may find offensive or else it will be banned. Some companies that had adverts banned include Irn Bru and Yves Saint Lauren. Examples of their adverts which were banned by the advertising standards agency (ASA) are shown on the next page. I will be very careful when promoting Mood Varnish not to use any methods that people may find offensive. When promoting Mood Varnish I will also need to take environmental factors into account as it is a big issue nowadays. The paper I will use for billboards and in magazines will come from recycled paper to cut down paper waste, to make my product appear technologically advanced I will promote it on electronic screens to give the idea of what its like, this will cut down on paper used and is unlikely to disturb the environment. Furthermore I will try to promote in places where it will not have a great effect on wildlife, for example in a train station or in a city centre where it is busy so people will notice the promotions but also so that it is not endangering the environment.
The Boston Box Matrix
A STAR is a product that has a high or rising market share within an expanding market because a STAR is in a high growth market. A lot of investment is needed to keep the product ahead of the competition. The investment can be in terms of product development, market and sales promotion in order to retain your competitive position or even in supporting price reductions to beat-off aggressive competitors using price as a weapon. Furthermore, with its dominant market position, the product would have greater influence over the distribution channels to the end market. Therefore, this product is unlikely to be as profitably as a CASH COW which it may become once market growth declines.
A CASH COW is a product which has a high market share in a relatively low growth market. Typically, the company will have invested in obtaining its high market share position and many of the competitors will now be investing in newer, high-growth markets. Therefore, the company will need to invest less in product development and marketing to retain its market share and the product can therefore be highly profitable.
The PROBLEM CHILD is a product which has low market share in a high growth market. The product is not in a dominant position in the market and is therefore having to react to competitors and employ aggressive and often expensive marketing techniques in order to increase its market share as it has not got a significant share of the market. It is possible that sales revenues will not generate the profits to invest in increased market penetration.
A DOG is a product in a low growth market with a low market share. It is likely to be under pressure from competitors with a higher market share. Increasingly, its market share would be extremely costly against competitors who may have much greater profits to defend their position, eg CASH COW and it is questionable whether further investment in defending this product in a low growth market would be profitable.
How the Boston box matrix affects my marketing strategy:
Maybelline will start with a high investment to ensure they gain the maximum amount of market share possible, as soon as possible. To make Mood Varnish a STAR they will have to have very low starting prices which are distributed widely, furthermore Maybelline should advertise and have a strong promotion strategy in order to make the product become a CASH COW when a rival company like Revlon for example, introduces their alternative, at a higher price, Maybelline will then be bale to gradually increase the price.
The Ansoff Matrix
This is a model which identifies growth strategies for a business based on an analysis of their products and their market. Also, Ansoff looks not just at the management of a product portfolio but also widely at market developments and opportunities.
Marketing Strategies:
These are the approaches taken to marketing by a business which enables it to achieve its objective. Marketing strategies used by Maybelline include promoting products through a large range of media; by pricing products reasonably, selling in a large variety of outlets and lastly because Maybelline is a very well-established company, this ensures that they are trustworthy. All of these factors help Maybelline achieve its objective which is to have a large share of the market place and to make a profit.
Competitor Analysis:
There are many competitors facing Maybelline in their beauty range but in regard to my new product, there should be very little direct competition because it is a new product which is not on the market yet, so there will be no other brands selling it. Maybelline is known for supplying good quality cosmetics. It is also known to be the first company to produce mascara. Other brands cannot say this, so it is a weakness for competitors. Other brands such as Estee lauder are quite expensive. This is an advantage on Maybelline’s part because their products are not cheap but are reasonably priced. This is another strength for Maybelline. Maybelline does not have an exclusive Maybelline shop. This can be seen as a weakness as people do not get the opportunity to have a make-over and enjoy the full benefits of the make up and beauty ranges. My personal opinion when it comes to Maybelline is this: when I think of a cosmetics brand, I think of Maybelline, mainly because of its catchy slogan “maybe she’s born with it; maybe it’s Maybelline”. I think their products are reasonably priced but you are definitely paying for the quality. I think the way they advertise attracts a lot of attention because they are in all the magazines and are on many different TV channels. All of these reasons put Maybelline above its competitors.
How the Ansoff matrix relates to my marketing strategy:
Maybelline will promote Mood Varnish through a large variety of media, their price will be £5.99 which is very reasonable, they will sell in many outlets around the country and Mood Varnish will have to be good so that Maybelline ca keep its trustworthy name
Marketing Mix:
Objectives are goals that a business is trying to achieve through marketing. My first marketing objective is to target a new market or market segment and decide which Maybelline will sell in, firstly they can sell locally, but seeing as Maybelline is already an international company this would be taking a step back, it would be much more sensible for Maybelline to go international with Mood Varnish as that have with their other ranges. Lastly Maybelline could limit who buy’s their product by pricing, for example teenagers and people on low incomes are unlikely to buy a small product like nail varnish if it costs more that £10, I will therefore price my product at £5.99.
Another objective for my business is to achieve or maintain their percent of the market. Their goal will be to gain 10% of all market sales within 3 years of launching Mood Varnish. Once achieved a decision must be made of how to maintain or increase this share in the face of competition, to maintain this they will keep their prices slightly lower than that of competing brands but will raise the price gradually over the next year.
A further objective of Maybelline is to produce new or differentiated products to have the advantage over competitors and will eventually increase profitability and revenue, targets for these must also be set. The target I have set for Maybelline is to double their profit in the second year of sales to that of the first.
Mood varnish is a good example of an extension strategy, nail varnish, although still a valuable product is starting to get boring, hence the reason new types such as metallic effect, 60-second dry, non-chip and others have been introduced. I believe that Mood Varnish will take off well in the right market; a factor, which may help mood varnish progress, is brand loyalty.
The Mood Varnish may face lack of financial support, legal requirements and economic changes, to overcome these I will ensure that Maybelline ‘pumps’ money into the product until it is stable in the market.
PLACE
The channel of distribution describes how the title of ownership passes from the manufacturer to the consumer.
There are three levels of distribution, firstly the manufacturer makes the product and sells it straight to the consumer, through mail order and services. A second way of distribution is the manufacturer makes the product and sells it to a retailer who then sells to the consumer; these are likely to be shopping goods. Lastly is the third level of distribution this is usually associated with convenience goods. The manufacturer will sell to a wholesaler who sells to the retailer who sells to the consumer. As the product goes down the chain its size get smaller for example the wholesaler will buy in bulk and then break it down into smaller quantities for retailers. Maybelline are in the second level of distribution as the manufacturer sends the products to the individual retailers and then the product is sold to the consumer.
Intermediaries are wholesalers, who break bulk, as explained above, and agents, who do not take ownership of the goods. They represent a firm and try to gain sales for it. They will receive a commission and are often used to enter overseas markets.
Distribution strategies include the push strategy; this is when a manufacturer forces goods through channels by giving intermediaries incentives, for example discounts, higher margins and display items. A further distribution strategy would be the pull strategy; this focuses on consumers, by appealing to them directly. The aim is to make them demand the product and force intermediaries to stock the product.
The different types of channel are
- Extensive, these have widespread distribution. For example convenience goods.
- Selective, these are selected outlets with suitable environments and image, for example shopping goods.
- Exclusive, this has a very limited number of outlets and only sells specialty goods, for example Gucci.
Mood Varnish will be in the Selective channel this is because they choose which outlets sell their products. When choosing which channel to set my product in I had to consider these factors:
Costs, which shops sell which channels of goods, this will depend on how much profit and custom the shop will receive, therefore reflecting on Maybelline’s sales. Shops such as Debenhams, Boots, Superdrug and big supermarkets- Tesco for example all stock Maybelline as well as their own brand name products. They are likely to receive a lot of custom from these shops because their products are slightly more expensive but not too much more so customers will buy the known brand rather than the shop brand.
Maybelline is an existing cosmetics business so are able to sell in shops, however if they were unable to sell this particular market then it could consider other methods of selling, for example door to door or catalogue. Lastly the type of product affects, which channel the product is in, industrial products tend to have shorter channels as they have fewer customers and a more complex product, which needs detailed explanation. Mood Varnish should be in this channel to an extent because it has lots of new technology and therefore needs explaining, this can be briefly explained on the packaging though, so is not such a problem. Fragile, expensive products are likely to have a short channel but products such as Maybelline, which are widespread and are basic low value items have long channels with many intermediaries.
PRODUCT:
Consumer’s will judge the product, Mood Varnish, on several things, its appearance, shape, size, smell and cost, furthermore there is little point of a product meeting consumer needs if it can’t be produced at the right cost, if production costs are high then this will reflect on the overall price of the end product.
I have decided to create my product to be 6cm high, 3cm wide, this will be value for money as it will be priced at £5.99, this is around the cost and size of a regular nail varnish and so being a new colour changing type will attract customers. In addition to this the aesthetics include the product being packaged in very shiny, pink and purple boxes which will change colour as the light changes, this will reflect on the product inside.
Mood Varnish is likely to be criticised for not living up to the standards promised by the promotion strategy, this could be avoided by making sure that mood varnish does in fact live up to the criteria set up for it, I will make sure that Mood Varnish does not test their products on animals and that they recycle, then use this to entice more potential customers to try Mood Varnish.
Product lifecycle:
A business, in this case Maybelline, need to decide whether to let a product decline or if they want to put money into the product to revive it, Mood Varnish means Maybelline is reviving their nail varnish range, they are spending money on the new technology needed to produce the Mood Varnish. This will be quite a lengthy expensive procedure. but will make their nail varnish different and interesting. Furthermore this will give Maybelline a unique selling proposition as it is differentiated from rivals; this gives Maybelline the competitive advantage.
Performance- the product needs to live up to its marketing promises and includes all the features which it claims to have. Furthermore it needs to be reliable, for example the varnish must change colour depending on your mood as it states that it does. If it does not then the customer would be disappointed and not recommend it to others. This will lead to limited sales and people would not recommend this product to their friends, this would loose Maybelline money. The durability of the Mood Varnish is another factor which needs consideration, if the varnish is good for the first few uses and then dries up or doesn’t work any more, this will cause customers to complain and they will be likely to return the product, causing Maybelline to again lose money.
A problem which may face Maybelline’s old range of nail varnishes is product cannibalisation. This is when the sales of a newly launched product reduce the sales of another existing product. However may Maybelline have a large age range of consumer’s so they would not all be interested in the new varnish but the main target group, teenagers would be drawn to buying Mood Varnish, so their other varnish sales would be reduced.
Maybelline is very well known as it is a global corporation with headquarters in London and New York, with branches throughout the world, furthermore Maybelline has a large range of products which can all be expertly used and are in many cases, for example they are used in the make up of film stars before they go on set, an example of this would be Mandy Moore in ‘A Walk to Remember.’ Maybelline are a joint company with L’Oréal, singularly they are very substantial organisations but together they dominate a large portion of the market.
PRICE
Why does Maybelline set the Mood Varnish at £5.99?
Different methods of pricing are:
- Skimming penetration
- Competitor based
- Demand based or perceived value
- Cost based pricing
- Price discrimination
- Loss leader
- Psychological
Maybelline would generally want to cover their costs and make a profit for investment and to reward their shareholders. Another factor to consider is demand and elasticity, for example nail varnish is not in too much demand as you can get it everywhere a convenience item, and so the price cannot be too high.
The varnish is heavily branded which makes it more expensive than other unbranded products; this may mean that it looses some potential customers to cheaper brands but also that it is reliable, because it has a good name. Mood Varnish will have high initial costs to cover research, which will have to be covered by Maybelline because they will be using the loss leader strategy. After the first couple of years the price will increase as competitors enter the market, as long as Maybelline stays on the less expensive side of brands such as Revlon, they will still hold the lead.
The price of a product should be a reflection of the market which its aiming to sell in, so Maybelline will be aiming at the teenage consumer as it is a teenage style product, it is unlikely that older people will purchase the product so Maybelline should advertise in teenage magazines, channels that are watched by teenagers and in places where they are likely to go, for example the cinema or shopping malls. Maybelline will have to ensure that productions costs are kept to a minimum so that these costs don’t reflect in the price of the end product.
I have chosen to price Mood Varnish at £5.99 because from the information I got from the market research I carried out, it seems that teenagers would be willing to spend that on a nail varnish, as long as they believed that it works and is value for money. Maybelline has a trustworthy reputation and there will be testers for the customers to try so they should realise that it is value for money and a good product. Furthermore this price associates to psychological pricing as it is £5.99, this makes the product seem less expensive than if it was priced at £8, another way a business could use psychological pricing would be to say for example was £12 now £6,this makes customers think they are receiving value for money.
Maybelline is a large cooperation so is able to incorporate predatory pricing into its marketing mix, this is when a company undercuts competitors to remove competition, then once the competition is abolished the price is increased again. The down side of this is large organisations continuously undercut each other causing a pricing war. Maybelline is likely to get caught up in a price war with Revlon if they release an alternative product.
PROMOTION
Promotion involves communication about the product or service.
Its objectives include:
- Making customers aware of the new product
- To persuade consumers
- To remind consumers of the features and benefits of the product.
Maybelline currently uses above the line advertising for its other product ranges, they advertise in places such as television adverts, radio and magazines, however Maybelline does not use below the line promotion which includes personal selling. I think that for my product, Mood Varnish, both types of promotion should be used; this will give my product the most rounded amount of advertising and therefore boosting popularity and sales.
Mood Varnish could come up with a slogan or catch phrase to attract customers, Maybelline is already known for “Maybe she’s born with it, maybe its Maybelline.” So introducing a new catch phrase will have to match the previous well structures slogan. On the other hand, if Maybelline did have a new catchphrase for the Mood Varnish and it turned out to be more appealing, then the old slogan would be used less frequently and Maybelline’s main attention would be undermined.
The information which I collected form my questionnaire will be useful in deciding where to promote my product, as I found out, the most popular T.V channels were E4, channel 4 and BBC1, this implies that teenagers watch these channels frequently and therefore would be the bust channels to promote on. Furthermore advertising on billboards, in and around train stations, bus stops and cinema’s are places teenagers visit regularly and therefore are likely to catch the attention of the target market. The billboards and other advertisements should:
- Attract attention: the adverts should be bright bold colours, which catch the attention of passers by. They should not be full of text, they should have a picture of a model wearing the varnish and showing it change colour, maybe by using new technology to make it change colour, or using a rotating billboard which show the actual change. A further way of showing the colour change could be to use special paper so as people walk past the colour changes, as it is light reflected.
- Develop desire: the adverts should show the product working and show it making the model seem attractive and desirable. This will influence people to buy the product as they will want to be like the model.
- Create interest: the adverts must create interest to the customers. It is likely that mood varnish will generate interest as it is a new product in an existing market, where old varnishes seem boring and old fashioned, the new mood varnish will crest a lot of interest if promoted well.
- Lead to action, the adverts must make the customer want to buy the new product; if it doesn’t then the promotion had been useless. Furthermore the adverts must show a defining feature of the product which will make the customer want to try the product to see what it is like. It is likely that the advertising will lead to action as Mood Varnish is a defining feature in itself.
Other methods of promotion which Maybelline may try out on Mood Varnish include:
Sale promotion: this is a short term incentive to increase sales. Some examples of these include coupons and competitions. These methods may be useful when trying to encourage brand switching and destroy loyalty to other brands. This is an example of below the line promotional activity. Maybelline will introduce money off coupons when they are first introducing Mood Varnish, so for example if a customer bought a foundation or lip-gloss, they would receive a 50% off coupon.
Advertising: this is paid for communication which is referred to as above the line promotional activity, Maybelline already uses this type of promotion and should continue to do so with Mood Varnish. Some examples are adverts in magazines, T.V adverts and radio communications.
Public Relations: this involves managing relations with different public, for example the media, consumers, pressure groups and investors. Using the media may help promote the product by having coverage of an event or product launch, which will generally create a favourable impression and generating word of mouth interest. The only disadvantage of this type of promotion is it is impossible to control what others write or say about the product.
Merchandising: this is an attempt to influence consumers at the point of sale. Maybelline could do this by giving away free tote bags, or other small inexpensive items with every sale of the new product made. This will make customers think that they are getting value for money, thus promoting brand loyalty. With Mood Varnish Maybelline will be giving away a free tote bag with every sale, apart from if they have already had the 50% off discount.
Direct Mailing: this is when information is sent through the post, coupons and other promotional information could be sent to encourage people to purchase the product. A disadvantage of this may be that customers get annoyed about being sent ‘junk mail’ this may cause them to disregard the information and not to purchase the product unless it is a very good promotional offer which attracts their attention, therefore Mood Varnish must attract the customer’s attention.
Branding: this is the name or design which identifies the products or services of a manufacturer and distinguishes them from competitors. Maybelline is a reputable company with a distinguished range of products; this will make it easier for Maybelline to promote a new product as they will not be starting form scratch and having to build up a new reputation.
Packaging: this is the design, shape and information, which is displayed on the product. In the case of Mood Varnish, this will include pink and purple boxes, which change colour as light reflects off it. The box will explain what the inside product does and the advantages of it. Packaging is a very important feature of promotion because although you shouldn’t ‘judge a book by its cover’ most people do. This makes it vital for Mood Varnish to be in appealing packaging.
Personal Selling: this is the use of sales representatives. Maybelline doesn’t use this technique, although I believe that for Mood Varnish it would boost their sales, as people would have the chance to see that the product works.
PRINCIPLES OF MARKETING:
Marketing is essential to the success of any business, its primary aim is to enable the business to meet the needs of their actual and potential customers, whether for profit or not. If a business’s marketing is to be successful it must:
- Understand customer needs.
Maybelline has a large range of products, some being for face, nails and body. For Mood Varnish the target market is going to be teenagers, as they seem the most likely age group to purchase the product. Within Maybelline there are many products aimed at different age groups, for example their make-up range is widely used by all generations; this is the same for their nail ranges. There have to be products for all ages or else Maybelline would lose custom. The customers would obtain the products through outlets such as Boots or Superdrug, for mood varnish I think that Maybelline should open some unique stands so that customers are able to try out and see the benefits of Mood Varnish. This could be seen as an additional feature used by Maybelline, only for the promotion of Mood Varnish: after the customers have received their free trial of the varnish they will be asked to complete a questionnaire to find out if the product is what they, as a customer, would want or if there are improvements which need to be made. Furthermore the organisation will want to find out if customers think the pricing is right, the colours chosen are good and what they think of the packaging design.
- Understand and keep ahead of the competition.
Main competitors of Maybelline include Rimmel; Bourjois; Revlon; Clinique. This is because their products are aimed at the teenage consumers as well. However in the questionnaire’s I carried out, Maybelline came out with the highest number of clients. As Maybelline is already an international organisation, Mood Varnish will have to compete on the global market to ensure good sales. For example the product would make more profit being sold in America as well as England, than in one or the other. Maybelline competes with its main competitors through brand loyalty, promotion techniques including discount vouchers. Maybelline is also a reputable company which some of its main competitors are not; this gives them a competitive advantage. Although Maybelline is priced slightly higher than some of its competitors it is still one of the leading brands as customers are getting value for money. Also Maybelline are able to have their prices that little bit higher as they are known globally so customers will be willing to pay the price.
- Communicate effectively with its customers to satisfy customer expectations.
The stakeholders of Maybelline include the shareholders, creditors, customers, managers, and shop owner’s who stock Maybelline products. Ways that Maybelline communicates with its customers are through advertising, promotion, the Internet and postal information. By doing these things Maybelline communicates with customers and attracts potential customers. A further indirect way of spreading the word is through word of mouth, this means that Maybelline must ensure all their products meet good standards or else they won’t get the support of new customers.
- Co-ordinate it’s functions to achieve marketing aims.
Maybelline organises its production so that all of their products are in all of the shops, which stock Maybelline. This means that there has to be a distribution to all the outlets of all products in all the colours and sizes available so that a customer can walk into any outlet selling Maybelline and have the same range as they would anywhere else.
Maybelline has to inter link its internal functions. This means that marketing research, which is carried out, should have an influence of product development; this will lead to sales promotions which are linked with advertising, merchandising, selling and customer service. Generally all these functions are linked and are pointless to exist on their own because they will not have any effect on the end product and furthermore will not increase sales.
- Be aware of constraints on marketing activities.
Some constraints, which face Maybelline, include advertising, the advertising standards authority (ASA) was set up in 1962. It is an independent body that controls all advertising. Places they have control over include; the press, anything that is published in newspapers or magazines must be honest and truthful and not breaching any regulations.
Another is outdoor advertising, these include billboards, posters in public area’s and bus advertisements, these cannot contain anything offensive such as violence or sexual images. Lastly screen promotion is controlled by the ASA, this states that advertisements must be suitable for the audience, according to the age restriction of the film it is being presented in, furthermore computer advertisements cannot be offensive or contain nudity or violence unless by confirmed user registration.
The ASA can withdraw misleading or offensive advertisements within a short time, if a company refuses to remove the advertisement then the ASA can use these sanctions to try to enforce its decisions; adverse publicity generated by monthly reports of adjudication’s; refusal of media space; withdrawal of privileges such as discounts and incentives resulting from membership of advertising bodies and legal proceedings against persistent offenders. Further constrains include animal testing, price of product, recycling issues and where the product should be made, for example it shouldn’t be produced in an area where employment is high, it should focus on opening a production plant in an area with low employment. Another big constraint is ethical issues; most companies nowadays believe it is necessary that they show the public that they operate in an ethical manner. Some ethics are enforced through the legal system and provide a mandatory constraint upon business activities for example poor treatment of employees and genetically modified products.
Maybelline is under the control of L’Oréal. This restricts their power to merge with other companies as it may make them a monopoly. Maybelline is a highly competitive company because it is in a large market with lots of companies selling the same products, so by introducing new products, which are innovative, it gives them a competitive advantage. This is why Mood Varnish seems like a good product and will market well. With Mood Varnish Maybelline will be a pure monopoly as there are no other companies which sell the product, this means that theoretically Maybelline can put the price to whatever they wish, but in order to get the custom of potential teenage consumers Maybelline will have to set the price at a reasonable level.
How the principles of marketing relate to my market research and marketing strategy:
For a company to understand customer needs and keep ahead of the competition, market research and maintaining a continuous market information system are essential.
There are several types of market research:
- Product studies, as regards to developing and testing new products, and measuring consumer preference for both the product and the packaging.
- Market analysis, in an attempt to measure current and potential sales, and to identify the appropriate market segment, i.e. the consumer, their characteristics and the target areas.
- Advertising studies, to measure the effectiveness of the choice of media, the advertising campaign and the audience characteristics.
Collection of data: the input of relevant data is not an intermittent of periodic event; it occurs all the time and the data are readily available from such sources as the media and news reports. Data are usually available from many other sources and, depending upon their source and method of collection, can be classified as primary or secondary data.
PRODUCT: product lifecycle, this is a new product and so will be at the beginning of it’s lifecycle.
It is crucial that the company can produce enough of the product to meet the demands, this is called the economy of scale.
PRICE: this involves the elasticity of demand, market research indicates that peple will buy easily if price is low, then if price goes up the customers will continue to buy the product if they like it and then the slight price increase will not matter. There are six main points which determine the final market price, these are:
- Consumer- demand which is influenced by the reputation of the company, promotional elasticity and the demand for other products.
- Competitors- and their share of the market, their promotional campaign and costs incurred and their reputation.
- Time scale- pricing as a short term measure or tactic, e.g. penetration pricing or as a long term strategy, e.g. satisfactory rate of return method.
- Environmental, e.g. the effects of government legislation, such as prices and incomes policies and macroeconomic policies as measures to control inflation, availability of subsidies and grants, EEC policies and social costs such as those of pollution.
- Other parts of the marketing mix and, particularly, the firms’ hierarchy of objectives.
- Price- Maybelline will use market penetration so this is the one I will explain in detail. Setting a below the competition price in order to capture a share of the market- even to the point of sustaining a loss- in the hope that the price may be raised subsequently after some brand loyalty has been obtained. However this strategy is potentially dangerous in inflationary conditions.
PLACE: this is a diagram of the distribution chain,
Maybelline could get Mood Varnish into the market through selling to retailers directly, or selling to larger retailers who will then sell to the smaller ones, bulk gets broken down here. Secondly they could sell direct to the market through magazines and direct mail. A further way could be through concessions in retail stores and lastly through the wholesaler to smaller retailers.
PROMOTION: Promotion is part of the firms total communication function. The promotional aspects of the marketing mix consist of the collection of activities which favourably influence the actual task of selling the product to a customer. The major constituent of the promotional mix is advertising but also important are personal selling and detailed sales promotion, which includes setting up displays in shops, staging exhibitions and the use of free samples. The three important factors in promotion are information, persuasion and influence.
Market research indicates that people will want to buy direct mail, and through supermarkets as well as department stores. This is evident through my target market because they watch BBC1, BBC4 and E4 mainly, and read, Heat, Ok and More.
EVALUATION:
It is essential that a business evaluates the success of their marketing plans. This will provide them with information on which to base future plans. Businesses also need to know whether or not planned activities were carried out in the manner which was planned.
The evaluation of marketing plans can take place both during the period of time in which the plan is being carried out and at the period of time in which the plan is being carried out and at the end of the time period (often one year) that plan covers. Evaluation which takes place during the period of implementation may allow managers and directors to better control marketing activities.
It is important that marketing plans are evaluated against clear, measurable criteria. To do this, clear performance targets must be agreed and set during the process of marketing planning. Such performance targets are often time specific, this means they are expected to be achieved by a certain date during implementation of the plan. For example the plan may require 5% growth in market share by the end of the first six months. A business may use a number of methods to evaluate a marketing plan. These include:
SALES ANALYSIS
This is an analysis of either the volume or the value of sales. If a business achieves a sales target then it may consider its marketing plan to be successful. Sales analysis is especially valuable to a business as it can be linked to:
- Sales by region, Maybelline is worldwide so the product is likely to be successful.
- Sales by product, Maybelline has a credible background so sales of its product will be influenced because Maybelline are known for good products and value.
- Sales by customer type, Maybelline’s main customer type are teenagers so Mood Varnish will have to meet their requirements. The product is aimed at teenagers so should fulfil these requirements.
- Sales via distribution channels, Maybelline is likely to succeed using its current channel of distribution process as it means customer get the amount of product they need at the right cost.
The problem with using sales analysis in isolation is that it may not be related to what is taking place in a wider market. For example, a business may be experiencing high sales growth and so consider its marketing plan successful. However it may be operating in a growing market in which competitors are experiencing even higher sales growth. With the case of Maybelline, Mood Varnish will be the only one of its kind so will have high growth but in general their nail varnish sales may not be as successful as other brands.
MARKETING PROFITABLITLY ANANLYSIS
Profitability is concerned with the relationship between profits and costs. In the context of marketing planning, profitability analysis is calculated by subtracting the marketing costs of a product from the revenue gained from the product:
Marketing profit= sales revenue of a product
(Quantity sold x price) –marketing costs (marketing research,
Advertising, distribution, promotion act.)
Thus a product with high revenue and relatively low marketing costs will be highly profitable. In contrast a product with low sales revenue and relatively high marketing costs will be less profitable.
It is likely that for the first few months of Mood Varnish being released it will fall into the second category because the costs of starting a new product and the general promotion and technology to make Mood Varnish will tend to be higher than the profit it accumulates. Hopefully if the marketing strategy goes well then Mood Varnish will move up into the first category and become a success for Maybelline.
The main benefit of calculating marketing profitability is that it can highlight some of the most and least profitable markets. Take the example of a business trying to increase sales of a particular product by moving into two new markets A and B. in market A, an increase in sales of 10% can be achieved with additional marketing costs of 5%. In market B an increase in sales of 45% can be achieved with additional marketing costs of 5%. This business may wish to focus upon the more profitable market, thus being B. in the case of Maybelline, at the moment it falls into market B which gives Mood Varnish a head start, because they will not be making a loss as there are other products which can help the company survive if it were the case that Mood Varnish was not successful.
The problem with calculating marketing profitability is that it is often difficult to calculate the marketing costs of particular products. In Maybelline’s case it will be hard to calculate how profitable it will be because it is a new product and there is no previous research to show how successful it may be. Another example would be promotional activities such as trade fairs and corporate advertising cannot be easily apportioned to individual products in a business with a range of products. This again is the case for Maybelline.
MARKETSHARE ANALYSIS
This method examines a business’s sales in terms of market share. It enables performance in relation to competitors to be more accurately gauged. For example, is a business meets its target of an increase in market share of 5% over a year then it may consider its marketing plan successful. Together sales analysis and market share analysis are a powerful tool in evaluating how well a business is doing. In my marketing strategy I am aiming to have at least a 5% increase in sales of Mood Varnish over the first year, if this is not the case after the first year money will have to be spent on making the product more exciting thus making people want to buy it more, however if it doesn’t make its 5% increase over the first year it will mean that the marketing strategy laid out for it was unsuccessful. However I believe that Mood Varnish will do well as it is aimed at the right market and priced to match.
SATISFACTION SURVEYS
Many businesses undertake analysis of their customer satisfaction surveys. These are detailed surveys designed to identify the reactions of customers to their products. They use this data to asses the extent to which marketing plans are leading to increases or decreases in customer satisfaction.
Maybelline has not released Mood Varnish so a customer satisfaction survey cannot take place yet. But before designing the details of the Mood Varnish product I did a survey about existing products. This helps me to understand what the customer will want and therefore leading to a greater sense of satisfaction when the product is released. Furthermore once the product has been released it is likely that Maybelline will carry out a further survey into customer satisfaction to ensure the customers are getting what they want. Ways the customer can complete a survey is through the internet, if they return or complain about a product they will be obliged to complete a questionnaire to improve the product and lastly questionnaires will be available at outlets stocking Maybelline. This will ensure that if a customer would like to comment on the product the option is there.
NUMBER OF ENQUIRIES GENERATED
Many businesses may pay very careful attention to the numbers of enquiries generated in particular aspects of their business. For example Maybelline would want to find out which of their promotions are noticed the most and who see’s them. This will give them a wider view of where the customers are and what they do. Furthermore if some of their promotional strategies work and some don’t the ones which do will be improved and exaggerated to try to encourage yet more sales.
In conclusion I believe that Mood Varnish will be a success for Maybelline and fulfil the criteria laid out for it. This includes a 5% sales increase in the first year and a large number of consumers which will spread the word and hopefully generate a lot of business for Maybelline.
Bibliography:
‘Business Studies’ Dave Hall
‘AVCE Advanced Business’ Dave Needham
New Woman magazine
Heat
Interview:
Miss Sam Southall.
‘Which make-up brands do you use?’
Maybelline, Revlon, Body Shop and Clinique
‘Do you know the slogan for any of these brands?
Maybe she’s born with it… Maybe it’s Maybelline, im not sure about the others.
‘If Maybelline introduced a product called Mood Varnish, do you think you would be likely to buy it?’
Yes because they are always coming up with cool new products, how much would it cost though?
‘£5.99’
Well I would definitely buy it then, at least to try it, I would say that £5.99 is wuite cheap for a new nail varnish so customers will enjoy getting the good deal.
‘Do you receive more than £30 per month in pocket money, or do you have a job, Sam?’
Yes, I make around £40 a month.
‘What do you spend you money on?’
Clothes, make-up, concert tickets ect, general girlie things.
‘What colours would you like to see a new range of?’
I would like to see companies making new alternatives to the boring colours, I do like the metallic effects and glittery nail varnishes but I think the colours are too similar.
From this interview I can see that Sam, like most of her market, is reluctant to spend too much so £5.99 is a good starting price. Furthermore, I can see that Maybelline is a favourite amongst her product brands; this is likely to be the same for her friends. I can also see that the product will be successful between people of her age.