M.A.C.

VIVA GLAM INDIA

Kristi Mileson, Kelley Pace,

Julia Westphal, Frances Silva,
Alysha Boyd Jones
Table of Contents
Introduction of Company………………………………………………………….3

Product Line……………………………………………………………………….4

Target Market in U.S………………………………………………………………4

Marketing Strategy in U.S…………………………………………………………4

Introduction of New Foreign Market……………………………………………...5

Local Competition…………………………………………………………………6

International Market Analysis……………………………………………………..7

Marketing Strategy…………………………………………………………………9

Bollywood Facts…………………………………………………………………..10

Localization……………………………………………………………………….11

Step by Step Chart; Opening a business in Mumbai…………………………….12

Distribution Channel…………………………………………………………….13

Executive Summary……………………………………………………………….13

Bibliography………………………………………………………………………14

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Introduction of the Company

MAC Cosmetics Inc. was established in 1984 in Toronto, Canada by Frank Toskan and

Frank Angelo. They were both involved in the fashion industry, Toskan was a makeup artist and

photographer and Angelo owned a hair salon, when they decided to launch a product that would

translate and endure professional photo shoots. The products were originally developed for

professional makeup artists and the first products sold in the U.S. were through the department

store Henri Bendel. “MAC opened their first standalone store in the United States in 1991, in

Greenwich Village,” (MAC).

In 1994, Estee Lauder acquired partial control of the company. Frank Angelo passed

away from complications during surgery in 1997 and the remaining share was sold to the

cosmetic giant by 1998. The headquarters are in New York City and the company owns 26

brands besides MAC including; Aveda, Clinique, Michael Kors, Origins, Smashbox, Tom Ford

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Beauty, and many more. Chart:

www.businessweek.com

Estee Lauder employs approximately 32,000 people and the chart explains the majority

of the people working for the company are female makeup artists around the age of 28. The

company mission is, “Bringing the Best to Everyone We Touch,”. The company’s products are

sold in over 140 countries across the world and net sales for 2009 were $7.3 billion, (Company

Profile, Estee). Specifically, MAC is sold in more than 65 different countries and territories and

is still targeted toward makeup artists and fashion-forward people.

Product Line

Since 1994, MAC Cosmetics has raised over $160 million towards supporting people

with HIV/AIDS with the Viva Glam line. Every campaign is designed to grab the attention of

consumers using undeniably fabulous spokespeople; RuPaul, Elton John, Lisa Marie Presley,

Eve, Pamela Anderson, Christina Aguilera and many others. 100 percent of the proceeds from

each lipstick and lipglass are donated to the MAC AIDS Fund. The company is dedicated to

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helping men, women, and children affected by the virus and chooses spokespeople who represent

diversity to deliver their message.

Target Market/Marketing Strategy in U.S.

The target market for the Viva Glam line is women, men, and transgender people who

want to be part of raising awareness and donating money to the AIDS cause. MAC is specific in

its mantra of, “all races, all ages, and all sexes,” that make up the diverse community they serve.

The marketing strategy includes glossy, glamorous ads in fashion magazines such as

Cosmopolitan, InStyle, Seventeen, Glamour, Vogue, Elle and more. “MAC Cosmetics use high

profile celebrity endorsement to promote their products,” (MAC). The ads feature the spokes

model(s) for each campaign done up in MAC makeup including the new shade for Viva and

looking glamorous and sexy. They also depend on word of mouth to promote the sale of their

products.

Introduction of New Foreign Market

Mumbai, home of Bollywood, is the most populated city in India. There are

approximately 14 million people living in the city which makes it the second most populated city

in the world behind Shanghai, China, (India). The neighboring areas of Navi Mumbai and Thane

together with Mumbai make it the fifth most populous metropolitan region in the world,

(Urmann).

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 Bollywood has surpassed Hollywood in making India, “…home to the largest film

industry in the world,” (Singh). Mumbai is the center of India’s commercial entertainment

industry and the richest city in the country. It is located on the west coast of India and features a

natural deep harbor that allows 40% of the country’s maritime trade to go through it as well as

25% of the industrial output, generating about 5% of the nation’s Gross Domestic Product. “It is

considered as one of the top 10 centers of commerce in the world because of its global financial

flow,” (Urmann). Because of India’s population, it is one of the fastest growing economies of

the world. With a growing GDP, the standard of living is on the rise and provides many

opportunities for the growth of a variety of businesses, (Poria, Why).

The banking industry is one of the businesses taking advantage of the opportunity in

Mumbai. As well as their own important financial institutions; Reserve Bank of India, Bombay

Stock Exchange, and National Stock Exchange of India, “JP Morgan, Standard Chartered, Bank

of America, and many other international banks have established centers in India to tap its

potential,” (Poria, Banking).

The primary religion of Mumbai is Hindu making up about 67% with the second most

prominent as Muslim with 18%. The majority of the people speak Marathi which is the native

language to the region where Mumbai is located but, they also speak Hindi and English, (The

Major).

The region is typically warm throughout the year; May is the warmest month with

temperatures up to 105° F and January is the coldest with an average of 75° F. The monsoon

season occurs between June and September and the heavy winds do not permit boats and sailing

during this time. September to October is high in humidity and temperature therefore harder to

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bear. From November to February the temperature and humidity fall and these are the most

pleasant months of the year. The hot weather begins in March and climaxes in May pre-

monsoon when the boat services and beaches are usually suspended, (Climate).

Local Competition

The cosmetic market is competitive in Mumbai because it is the home of Bollywood and

the commercial entertainment industry. We have identified two major local competitors; Gosh

Cosmetics and Lakme Cosmetics.

Gosh Cosmetics is a Danish brand established in 1945 as a pharmaceutical company.

During the 50’s they branched out into the health and beauty division which is the primary

business of the brand currently. Mostly known for their beauty products and perfumes, they

gained popularity and market share for cosmetics in the 1980’s and 90’s, (Company Profile,

GOSH). They’re known for hip and trendy cosmetics in many different colors including brightly

colored mascaras, eyeliners, and nail polish. Their products are comparable to MAC in quality

and selection but the price of Gosh is slightly less. Gosh is an international company known

worldwide for many different products. “Our mission is to develop and create top quality

products and brands in constant evolution that satisfies the needs of end-consumers, working as a

team with distributors and the most prestigious stores all over the world,” (Company Profile).

They do a very good job of keeping up with the trends and changing needs of customers.

Lakme Cosmetics was founded by the Prime Minister of India, Jawaharlal Nehru, in 1952

because he realized that the majority of women in India were spending much of the foreign

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exchange on beauty products (Lakme). Lakme was bought out by Unilever in 1998 (Hindustan)

who continued to expand the goods and services of the brand by opening salons carrying Lakme

products and employing Lakme trained professionals. “By opening its own salons, Lakme found

fresh opportunities to bolster its brand, from professional staff who promote its products to a

growing customer data base built up through a loyalty-card program,” (Cris). Lakme fashion

week is another way the company has gained market share. In partnership with IMG Fashion,

Lakme puts on a show twice a year during fashion week in Mumbai. “Combining international

cosmetics technology with an in-depth understanding of the Indian woman’s needs, Lakme

offers its consumers a holistic ‘Beauty Sutra’ experience through its products and services…”

( Event). Lakme Fashion Week is one of India’s most prestigious fashion and trade events.

International Market Analysis

India has been ranked as one of the most attractive emerging markets for investing in the

retail sector in 2009. “In the entire Gross Domestic Product of India, the share of retail trade was

between 8-10% in 2007…and in all probability will touch 22% by the end of 2010,” (Indian

Retail). It has been estimated that by 2025, the retail market will grow four times larger. In

2009, India was 39th most preferred retail destination; when in the previous year, they were

ranked 44th. Between 2009 and 2010, over 100 malls were estimated to open. Apparel, next to

food and grocery, is the second largest retail category, growing 12-15% annually. The Indian

market currently has an average annual GDP growth of 6%, but the current Prime Minister, Dr.

Monmohan Singh, plans to take steps to increase that to growth to 9%. “The World Bank has

projected that the market growth rate of India will reach around 8% in 2010, which may overtake

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China,” (Indian Market). Due to technological advances, there was a growth in the number of

exports, as well as the quality of the exported products.

Because the population in India has experienced exponential growth, the demand for

consumer goods has increased tremendously. The table below showcases the amount of change

recorded within the last 15 years.

Demand for Consumer Goods

1995 – 1996 2001 – 2002 2005 – 2006 2009 – 2010

(est.)
CARS 276 788 1560 3466
MOTORCYCLES 760 2599 4663 8369
CTV REGULAR 1785 4580 6295 9957
REFRIGERATOR 1850 3006 4335 6774
S
WHITE GOODS 3437 6024 8727 13149
Chart: www.ibid.com

Marketing Strategy

MAC endorses high profile celebrities and the new campaign will continue with this

trend as MAC expands into India. Mumbai is the home of Bollywood, which is the perfect place

to select the next face for the Viva Glam campaign. Instead of going for the established famous

name, MAC is looking for a fresh new image. That is why Jiah Khan has been determined as the

next Viva Glam campaign spokesperson. The reasoning behind this choice is simple. She is

amazingly gorgeous, appeals to a wide demographic, and is relatable to the MAC client.

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 Jiah Khan was born in New York on February 20, 1988 to actress Rabia and then moved

to London. Khan loved to dance and sing but acting was her passion. In school, she studied

acting and for an assignment, she had to meet Hindi film directors and actors. RGV, or known as

Ram Gopal Varma, was on the top of her list. When she arrived in Mumbai for a holiday, she

went to his office and he asked her to try out for a role and Jiah said yes. Her career started at

that moment. Her first movie, Nishabd, was a hit. Her character role, which was a very strong

one, proved her as an actress that took her job seriously. The other films that followed her debut

role in Nishabd include Ghajjni, which she played a medical student, and Asin that became a

huge success. Asin was also the largest grosser Bollywood has seen to date. She has been labeled

as Bollywood’s newest “sex bomb” and her future in the film industry has only just begun.

The first piece of deliverables that will introduce Jiah Khan as the next big name to the

Viva Glam campaign is brochures. These will be kept in MAC stores and handed out to clients

so they will get to know and identify with her. Then, after about three to six months following

the brochure introduction of Jiah, her Viva Glam campaign will start. Khan will be in India’s

fashion magazines and posted on the website as Viva Glam’s starlet promoting the AIDS cause.

Bollywood Facts

 Bollywood is the name given to the Mumbai-based Hindi-language film industry in India.

It is considered to be the largest in the world in terms of number of films produced, and

also the number of tickets sold.

 The term Bollywood comes from the word Bombay (the city now called Mumbai) and

Hollywood (the famous center of the United States film industry).

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  Bollywood films are usually musicals. Few movies are made without at least one song-

and-dance number. Indian audiences expect full value for their money; they want songs

and dances, love interest, comedy and thrill.

 The plots are very dramatic. They usually involve plots such as star-crossed lovers,

corrupt politicians, twins separated at birth, conniving villains, angry parents, courtesans

with hearts of gold, dramatic reversals of fortune, and convenient coincidences.

 Because of all the entertainment culture, we believe that using Jiah Khan as our next

spokesperson will be a sensation around the world.

Localization

The chart on the next page is a detailed step by step list of procedures required to open a

business in Mumbai, India. Items 7 through 13 can be done simultaneously whereas the first six

steps must be done in that order as they build upon each other. The number of days it takes to

complete each step is shown as well as the cost in dollars and Indian Rupees.

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 The exchange rate for the Rupee is 46.4952 to 1 U.S. Dollar. The graph below shows the

changes in the value of the Rupee to USD in 2010.

 Indian Rupees to 1 USD 

latest (Jun 14) lowest (Apr 14) highest (May 25)

120 days
46.4952 44.2299 47.7133

Chart: www.x-rates.com

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13
No cost 9 Days
Register for medical insurance at the regional office of the Employees' State Insurance Corporation
No cost 12 Days
Register with Employees Provident Fund Organization
No cost 2 Days
Register for Profession Tax at the Profession Tax Office
$110.03 or INR 5,100 12 Days
Register for Value-Added Tax (VAT) at the Commercial Tax Office
$140.24 or INR 6,500 2 Days
Register with the Office of Inspector, Shops, and Establishment Act
$1.23 or INR 57 7 Days
Obtain Tax Account Number (TAN) for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department
$1.44 or INR 67 7 Days
Obtain Permanent Account Number (PAN) from an authorized franchise or agent appointed by the National securities Depository LTD or the Unit
Trust of India Investors Services LTD, as outsourced by the Income Tax Department
$7.53 or INR 350 1 Day
Make a seal
$303.90 or INR 14,133 5 Days
Get the certificate of Incorporation from the Registrar of Companies, Ministry of Corporate Affairs
$27.95 or INR 1,300 1 Day
Stamp the company documents at the State Treasury or authorized bank
$10.75 or INR 500 2 Days
Reserve the company name online with the Registrar of Companies (ROC)
$32.25 or INR 1,500 3 Days
Obtain digital signature certificate online from private agency authorized by Ministry of Corporate Affairs
$2.15 or INR 100 1 Day
Obtain director identification number online from the Ministry of Corporate Affairs portal
Distribution Channel

MAC is a professional makeup brand that is used for fashion shows and events. One

method of distributing the new shades of makeup for our Jiah Khan Viva Glam campaign is

through India Fashion Week held in Mumbai. We will be meeting with designers showing

during the event and encouraging them to use our products on their models. Other distribution

channels will include:

 The use of our products on shows

 The use of our products in films and for film award shows

 Promoting our new campaign on the MAC website recently created exclusively for India

 Placing our promotional materials in department stores, and salons selling our products

Executive Summary

“India’s dynamic film and entertainment industry is a source of inspiration for many

cultures around the world. The powerful vibe of creativity that emanates from India’s talented

actors, directors, and production artists ties in with MAC’s commitment to artistry worldwide.

Our presence in India allows us to support these industries and collaborate with the culture of

creative artists responsible for these ideas,” (MAC in Bollywood).

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