MAC Cosmetics

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Part
01

MAC Cosmetics

MAC Cosmetics was founded in 1984 and it is a cosmetics brand that is currently operating under the Estee Lauder umbrella. MAC is known for their "All ages, All Races, All Genders" motto and it is one of the leading brands when it comes to promoting inclusivity. MAC's main product is the Ruby Woo red lipstick which got famous after Madonna wore it for her music video in the 1990s.

Mac's evolution in terms of strategy and key moments in the brand's history explained

MakeUp Art Cosmetics was founded in Toronto, Canada by a makeup artist named Frank Toskan and a salon owner named Frank Angelo. The duo "became frustrated by the lack of makeup that photographed well, so they decided to create their own". At first, the cosmetics were sold directly to salons, makeup artists, models, and photographers. In 1984, the first MAC counter was launched in a Toronto department store. The approach to selling makeup was to package the products in black pots rather than compacts. MAC wasn't trying to dominate the skincare field, but decided to "establish itself as the ultimate color authority". Professional makeup artists have been manning the counter from the start, and the same strategy is applied today.

MAC was acquired by Estee Lauder in 1994, and today the brand is sold in more than 120 countries around the world. The brand is still committed to "developing new categories, products and over 50 collections each year, all of which continue to serve the demand of consumers and professional makeup artists alike".

Significant or primary products

The most significant product in MAC's offering is the red lipstick. The most known shade is Ruby Woo which was first worn by Madonna. Other significant products include MAC Prep & Prime Fix +, which is a primer. Furthermore, MAC Studio Fix Fluid and MAC Mineralize SkinFinish are powders which are considered iconic. MAC Lip Pencil in Whirl, MAC Eyeshadow in Wedge, and MAC Great Brows are also considered to be part of MAC's primary offering.

Brand and marketing strategies

MAC is famous for their tagline "All Ages, All Races, All Genders." which is the key guideline for MAC's brand positioning. The brand also markets itself as cosmopolitan, innovative, irreverent, and original.

MAC is known as a luxury brand, but they developed a concept of being affordable for customers. However, officially it is categorized as a luxury brand under Estee Lauder.

The brand also positions itself as "a proud community of professional makeup artists working together to bring our vision to life".

The biggest markets for MAC are United Kingdom, Brazil, India, South Africa and the Middle East.

More recently, MAC has been focused on inclusivity and targeting Millenials. A good example of such a marketing campaign is a film they recently put out called More Than T, which is a docuseries on the "challenging yet frequently inspiring lives of seven transgender people". MAC has proven to be a company that doesn't shy away from controversial topics in their pursue of exclusivity, which aligns perfectly with their "All ages, all races, all genders" motto.

The brand also has a reputation for being one of the most progressive brands that is focused on philanthropic activities. RuPaul and k.d. Lang were some of MAC's first spokespeople. Additionally, the company raised over $450 million through the MAC AIDS Fund that supports organizations that are focused on helping people living with HIV.

Management/ownership type

MAC was acquired by Estee Lauder in 1994. The whole Estee Lauder company is listed on the New York Stock Exchange, which points to it being a public company.

Drivers of their success

There are a few key drivers of MAC's success. The first, as already mentioned above, is company's focus on compact packaging. The second is the brand's pursuit of providing the best color products as possible. MAC also equips their stores with professionals that can help people choose the right products. The professional makeup artists also provide free makeup sessions in order to showcase what makeup would look good on consumers.

Recent issues mac faced

MAC started selling their products in China in 2005. Chinese government asks beauty companies to test their products on animals. And while MAC received a lot of backlashes after they decided to sell to China, they insist they do not test on animals. Instead, they say it's Chinese government performing testing in their own facilities. In their statement, they say: "We do not own any animal testing facilities and we never ask others to test on animals for us. While some governments conduct animal testing to prove safety before they will allow us to sell our products, we are advocating for change to prove there are alternatives."

CONCLUSION

MAC acquired by Estee Lauder in 1994, and it currently operates as a public company. The brand was recently faced with a lot of backlashes after it started selling their products in China, which means they were required to operate under Chinese laws that ask for animal testing.
Part
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Part
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MAC Cosmetics: Financial Data & Distribution

MAC Cosmetics is a private subsidiary of Estee Lauder, and for this reason there is no data published online regarding their different sources of revenue, as neither Estee Lauder nor MAC make this information public. However, I was able to find that MAC's global annual revenue is estimated to be $188.1 million. In addition to this, I have found that MAC hold a 3.5% share of total global online cosmetics sales.

METHODOLOGY

In order to answer this question I first searched for financial reports published by MAC Cosmetics to find their revenue splits based on products vs services, channel split within the US, US vs international, total US revenue and total international revenue. I quickly discovered that MAC are a private subsidiary of Estee Lauder, and therefore they do not publish their financials separately.

Next, I searched through Estee Lauder's published financial data. However, within their financial reports, Estee Lauder do not publish their revenue split by subsidiary.

I then searched through online articles, news stories, and statistical databases (such as Statista's section on the cosmetics industry) in order to find this data elsewhere. After a thorough search I have found that apart from overall revenue (global) this data was not available online. This is because it is not released either by MAC Cosmetics, or by Estee Lauder.

USEFUL FINDINGS

While I could not find a direct answer to your question, I was able to gather some information about this topic, which I think will be helpful for your project. To begin with, I found that MAC Cosmetics's total global revenue is estimated to be $188.1 million.

There is much data to suggest that Mac customers are highly active online perhaps in comparison to consumers of other makeup brands, which hints that online sales for the company may be thriving.

The online market share of leading beauty brands in the United States in 2013 (most recent year for which this data is available), based on percentage of visits to their online store tells us that MAC comes in second, behind Olay (4.97% market share) with a 4.05% market share. As for the share of the global market, Mac held a 3.5% share of total online cosmetics sales for 2016. They came behind Amazon's marketplace, who received a 21.1% share. In addition to this, I found that 30% of Estee Lauder's global sales come from department store sales.

Mac's customers are highly connected with the brand through social media. Mac is the beauty brand with the most Twitter followers, and with the highest number of Instagram followers.

This source suggests that Mac may be succeeding in online sales. Estee Lauder have recently been focused on e-commerce initiatives, which are considered to have been paying off. In total, 15% of the company’s total revenues come from online sales. The holiday season of 2015 particular marked an increase of online sales for the company, and its Cyber Monday sales in North America increased by 50% in comparison to the previous year. Finally, around 50% of appointments made at the M.A.C. makeup studio in Manhattan are made online.

POSSIBLE CONTINUED RESEARCH

In understanding what types of information are and are not publicly available on this topic, I’ve suggested a few other routes you may be interested in researching.

For example, above, I have explained that Estee Lauder have implemented initiatives in order to help grow their e-commerce side. You may wish to gain a deeper understanding of these initiatives, and see how they specifically have benefited MAC. In addition, I have found that MAC is the most popular makeup brand on both Instagram and Twitter, you may wish to investigate more about their social media strategies and success.

CONCLUSION

To sum up, MAC Cosmetics are a private subsidiary of Estee Lauder, and for this reason fine grain financial data is not available online. The company generates an estimated $188.1 million annually in total global revenue, and they hold a 3.5% share of total global online cosmetics sales for 2016. In general MAC and its parent company, Estee Lauder, are thriving in terms of online sales, and they have initiatives in place to grow their success in e-commerce.
Sources
Sources