delivering customer value (DCV)

BM0009-3-2 INDIVIDUAL ASSIGNMENT ASIA PACIFIC UNIVERSITY

Table of ContentsExecutive summary..................................................21.0 Introduction...................................................3

1.1 Company Analysis...............................................31.2 SWOT analysis..................................................5

2.0 M.A.C value proposition........................................62.1 M.A.C costumer center..........................................8

2.3 convert potential customer to profitable loyal advocate........8THE CUSTOMER PYRAMID TIER..........................................9

2.4 M.A.C customer relationship management (CRM)..................102.5 M.A.C processes the customer complaint........................10

3.0 conclusion....................................................114.0 Recommendation..............................................11

5.0 Reference.....................................................12

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Executive summaryThis project assignment has done to fulfill the requirement for module. Delivery Customer Value. The purpose of this assignment is to identify how the way the company create theirvalue and positioning their brand name to the customer, In this assignment the company has been chosen is M.A.C. there are several part that has been focus in this assignment. In part 1 (one) will be discuss briefly about the company profile, including SWOT analysis about M.A.C Cosmetic company as well their strong competitor in the same industry. Part 2 (two) will be analyze and discuss about the customer relationship marketing strategy that has been apply by M.A.C cosmetic company including M.A.C value proposition, experienceeconomy concept, how to convert the profitable customer into loyal advocates that can bring positive impact to the company and the way M.A.C company conduct their CRM program. And in Addition there are several recommendation for the company to can help them to improve their product in the future to increase customer satisfaction and create them to becoming loyal customer of M.A.C cosmetic product.

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1.0 Introduction Now days in very competitive era, Customer Relationship

Management (CRM) is premised on the belief that developing a relationship with customers is the best way to get them to become loyal and that loyal customers are more profitable thannon-loyal customers. Frederick Reichheld has argued that a company can achieve significant increases in profits from onlysmall improvements in customer retention rates. “The strategy is to engineer increased customer retention, often with strategies labeled as CRM or Customer Loyalty Marketing. Research indicates that these schemes are generally liked by customers”

And many company try to building and maintaining a good relationship with customer. because is the vital aspect to make the company can survive, currently many company start to applying Customer Relationship Management (CRM) to creating, help and maintain the relationship with the customer, customer

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relationship management is to ideate the personal bonding within organization and customer and through developing CRM itcan lead the business to achieved the success and gain more profit/ this assignment is to identify the company relationship with their customer that can influence the relationship quality.

1.1 Company Analysis According to the official website M.A.C ( Makeup Art

Cosmetic inc) was established in Toronto when makeup artist and photographer, Frank Toskan and beauty salon owner, Frank Angelo brainstormed a makeup line. Frustrated because of the lack of color that would shoot well with photography; their aim was to develop a studio line makeup line that would fulfill their professional needs. M.A.C was homegrown in Canada – literally. With every color, and every magazine credit, word-of-mouth popularity grew. In March 1984, the duo officially launched the line from a single counter in a department store in Toronto.

It was staffed with professional makeup artists, an industry innovation. Everything came in black pots rather than compacts. One of the most popular new offerings was an intensematte red lipstick that was used on a photo shoot with a New York cabaret star named Madonna, later photographed wearing a M.A.C T-shirt, the revolution was on. While other major makeupbrands were predominantly skincare companies, M.A.C chose instead to establish itself as the ultimate color authority. In 1998 a year after death of Frank Angelo, Estee Lauder acquire M.A.C

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And now M.A.C products can found in more than 70 countries around the world and there are over 12000 makeup artist aroundthe world work for M.A.C company and now became popular high-end makeup brand that market to woman and all kinds.

Sources picture 1.0: (Maccosmetics.com)

M.A.C Mission statement : To be the leading of Makeup Brand among professional makeup artist and customer. Withtheir Motto “All Races, All sexes, All ages. and to create the product that meet the consumer needs for the superior quality and offering the high level of services in their outlet around the world.

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1.2 SWOT analysis

STRENGHT

WEAKNESS

M.A.C cosmetic has create verywell known brand image and thefamous celebrity as their ambassador of their product-the brand itself receives many endorsement from professional makeup artist.-unique packaging and also very unique design of their outlet-highly trained staff in theiroutlet-and very good services from the staff so they can advice the customer about their makeup color preference that can suit for their skin.-sponsor of numerous awarenesscampaigns( positive community engagement)

The price of M.A.C product is very high only few people can buy their product.-lack of online sales because they focused on the store sales.-there is no in store gift with purchase promo

OPPURTUNITY THREAT M.A.C very smart when taking the opportunity they can

Recently M.A.C strong competitor is L’Oreal,

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create the product “M.A.C. Cosmetics introduces new collections as often as possible during seasons and for promotion . such as their cartoon collaboration and recently they launching Cinderella product.

Maybelline and Revlon. becauseM.A.C product is very high price and only few people can afford the product.And M.A.C only sales in their outlet so the customer cannot reach their product in the small store or in the drugs store (example:guardian,Watson,pharmacy,caring)

2.0 M.A.C value proposition M.A.C value proposition is clearly demonstrated through their website it is ensure their product has a large selection of many variety color and textures

Sources picture 2.0: (Maccosmetics.com)

In every M.A.C outlet they never failed to attract the customer to visit their outlet and looking for the product

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whether sometimes it just only quick visit because they success to make the customer curious with their new product launches.

Sources picture 2.1: (Dreamstime.com)

Sources 2.2 : (Glendacandedeir.com

And recently their success to promoting their new collection M.A.C Cinderella products and in first week it is already soldout in many M.A.C store in many country. Because of Cinderellamovie. Same with last year when they launch M.A.C Maleficent collection

Sources picture 2.3 : (News.instyle.com)

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M.A.C also having 2(two) outlet in every Mall one is store and the other one is stand alone outlet so it can make the more convenience with their customer because they can found the two outlet of M.A.CAll M.A.C employees is professional makeup artist and the attire of their employee must be black color.

M.A.C stand-alone outlet

Sources picture 2.4 : (Dreamstime.com)

M.A.C StoreSources picture 2.5 : (Dreamstime.com)

And M.A.C consider of the one of high end makeup brand with affordable price. and the product last for a few month, with the high quality outcomes because M.A.C is create from the Finest quality ingredient and proved by Dermatology tested.And every month they created interesting loyalty program that M.A.C customer will receiving a free lipstick, lipgloss, or eye-shadow after returning six (6) empty M.A.C container product to support their eco-friendly strategy that make them differentiate with other cosmetic brand.

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2.1 M.A.C costumer centerAs goods and services become commoditized, the customer experiences that companies create will matter most and The Experience Economy offers four realms of experiential value toadd to a business (Pine and Gilmore:1999) it is means the company should think about what they would do differently if they charge admission.

1.Experience is entertainment: Entertainment experiences entail watching the activities and/or performances of others. The customer is not actively involved in the creation of the entertainment, but the mind is actively engaged during appreciation of the event.(example: M.A.C company promote their product by using integrated marketing communication through used Celebrities as their brand ambassador, which cause a lot of attraction from their customer. And through launched the product collaboration with Disney and many cartoon icons.

2.Experience is education : Educational experiences increase the customer's skills and enhance his/her knowledge through active participation in the experience (example : in every M.A.C outlet they provide open tester units and ensure all of the products are available to try by their customer. because of that, they intention to hired the M.A.C makeup artist and ensure all of the M.A.C employees are professional makeup artist. it is means before they got hired they must have experience doing makeup in retail environment. And through this all the M.A.C employees can advise their customer about the good product based on their skin and also educated their customer by provide free makeup tutorial and free make over intheir store, this way to granted their customer will be back again in the future.

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3.Experience is escapist : Escapist experiences require that the customer actively participate in the events of a real or virtual environment. The customer shapes or contributes to theexperience, which offers the customer a way of taking on a newpersona (example : M.A.C allowed their customer to do their own makeup by using M.A.C product in their outlet )

4.Experience is esthetics : Esthetic experiences entail customer enjoyment of an enriched, unique physical design. Thecustomer enjoys passively appreciating or “just being in a setting” of the business. (example : M.A.C company desires their customer to be able to experience and try their product line in a very straightforward way, they start to design theiroutlet minimalistic with marble counter tops, and open tester units, by this way when the customer walk into a M.A.C store they inclined to be overwhelmed)

2.3 convert potential customer to profitable loyal advocate According Business dictionary Customer centric organization isthe way to puts the customer at the center of the organization(think of a circle with the customer in the middle, then the next circle surrounding customer circle is the company. A customer centric approach can add value to a company by enabling it to differentiate itself from competitor who do notoffer the same experience. From that perspective, all operation are focused on the customer.

THE CUSTOMER PYRAMID TIER The Platinum Tier

describes the company's most profitable customers, typically those who are heavy usersof the product, not overly price sensitive, willing to invest in and try new offerings,

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and are committed to the firm ( Zeithaml, Valarie A.; Rust, Roland T.; Lemon, Katherine N.(2001):.

Example: every new product that offering by M.A.C company always booming and they never failed to attract their customer because of their quality and very well known brand make the customer loyal for their product. M.A.C Cinderella collection even the price is expensive than other M.A.C common product. butthe customer still buy the product and they can persuade other people to buy the product.

And for these type of consumer M.A.C offering them member card discount, special offering programs and special customer services.

The Gold Tier From the Platinum Tier in that profitability levels are not as high, perhaps because the customers want price discounts that limit margins. They might not be as loyal to the firm even though they are heavy users in the product category--they might minimize risk by working with multiple vendors rather than justthe focal company.(Zeithaml, Valarie A.; Rust, Roland T.; Lemon,Katherine N.(2001):

Example: because of some of M.A.C customer is very price sensitive so they create promotional price for them through seasoning discount. And buy one free one. To keep their customer to still buy their product.

The Iron Tier customers that provide the volume needed to

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utilize the firm's capacity but whose spendinglevels, loyalty, and profitability are not substantial enough for special treatment.( Zeithaml, Valarie A.; Rust, Roland T.; Lemon, Katherine N.(2001)

Example: to convert the iron tier customer to gold customer is M.A.C cosmetic will give themspecial merchandise in every purchase of M.A.Cproduct and give them beauty advice so it willmake them will come again in the future.

The Lead Tier consists of customers that are costing the company money. They demand more attention thanthey are due given their spending and profitability, and they are sometimes problem customers--complaining about the firm to others and tying up the firm's resources(Zeithaml, Valarie A.; Rust, Roland T.; Lemon,Katherine N.(2001):

Example: to face this kind of customer M.A.C company must well trained their staff so they can handle the lead tier of customer and persuade them by the information and educate them more about the product details and give them extra service and discount of the product.

2.4 M.A.C customer relationship management (CRM)CRM aspect is the ultimate goal for every company Including M.A.C because they are B2C company. to keep their customer continually buying their product. M.A.C company apply this CRM

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concept through understand their customer as individuals instead of as part of a group and it will M.A.C product able to design its marketing plan and can be more focus on their customer centric by retain valuable customer and build long lasting relationship with them. Besides that they also enable to strengthen their customer knowledge and customer information to help them in business decision making. M.A.C CRM software able to analyze the store customer data and the type of product that can attract their potential customer on apersonal basis. And they success to increase their sales and customer satisfaction through their marketing program. The able to drive their customer satisfaction through provide the services such as beauty advice, and free make up from their staff. And they ensure the good interaction between the customer and the staff through empowerment their staff and their wholesaler to understand their customer by evaluate the customer purchase product.

2.5 M.A.C processes the customer complaintEven though M.A.C is well known brand of the good quality of product, besides that also there was some issues that M.A.C company need to face in the market place. They received a lot of complaint by their customer regarding their services. The customer felt they don’t have enough staff to serve the customer, sometimes the customer need for wait for them because they are to focused to the one person. and some unpleasant staff and some of them the customer found they are very racist.

To solve these problem the company provide their email address on their website and they ensure the customer will receive the replay the within 24 hours and also live chat

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services so customer can directly call the M.A.C customer services regarding their problem.

3.0 conclusion From the findings it can be concluded that M.A.C cosmetic company has good customer care activities which include, training of employees on customer handling, seeking customer opinion, create the extra value by mentoring the customer about beauty, launch the product that collaboration with Disney company, advice employee motivation and through their quality of product and well known brand name it can help the company increase their customer and make their band more stronger from the competition among the cosmetic industry on retaining customers as much as possible and it also can improve loyal customer of M.A.C product.

4.0 Recommendation-M.A.C company should reduce their price for its product, because the already well known brand that only for the rich people because they tend to put high price, they need to reduce the price so all the customer from every level can afford their product and also can increase their sales.

-Expanding their business to B.R.I.C markets (Brazil, Russia, India,and China)

According “Grant Thornton report Brazil, Russia, India and China are enormous markets that are rich in resources, but they pose significant and specific risks. Understanding those

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risks is key to unlocking their potential and tapping into thegrowth of their markets. Dealing with BRIC countries requires very specific insights in terms of geography, culture, business practices and resources, and understanding each in turn is essential to build up a successful strategy for growth”. the key success of product and services when the company able to expand the business to BRIC markets because inthat area when the company have the correct planning their products became very successful. Example : In India the top cosmetic brand is Lakme, Revlon and L’Oreal because the price is very affordable. So if M.A.C company can give the affordable price the product can became the top product because India is number (4) forth higher population in the world and it also can drive the customer and increase the sales.

-Create the CRM via digital Marketing

M.A.C should create the mobile application for create be visible to customer all the time and make them more convenientto look and searching about M.A.C product. Create direct marketing channel because apps serve many function (product info, prices ,booking forms, user accounts, news feed, testimonial and much more. By developing their mobile application M.A.C cosmetic also can easily engage with their customer.

-Create Male products

According to M.A.C motto “All Races, All sexes, All ages” theyneed to create Male products line with the Male roles models and male ambassador appearance so through this way they can increase their variety of products.

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5.0 Reference

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http://www.thebigspace.com/

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