Marketing Communications: Max Factor SK-II Issue
Part A – Description of Organization
The name “Max Factor” has become synonymous with beauty and fashion to millions of women around the world, and since its official founding on January 2, 1909, it has developed countless makeup innovations. Now being a division of Procter & Gamble, today, Max Factor is unmistakably associated with the most beautiful women in the world ( 2006).
The Max Factor & Co. was founded by Max Factor, Sr. He began as a makeup man for the Royal Ballet in Czarist Russia, and moved back to America in 1904, to start his own perfumery, makeup, and hair goods business. In America, he did not only sold his own work, but also served as a distributor for manufacturers of famous brands of stick greasepaint and other theatrical items. In 1914, he perfected the first makeup created for motion picture use thinner greasepaint in cream form, so with this major achievement, Max Factor became the authority in makeup ( 2006).
The company’s leadership in educating women to the subtleties of fashion makeup is legendary, for nowadays, the average woman would not appear in public or even in her own home without it (2006). This just means that the company has established its influence and reputation, being their savior concerning beauty and glamour. Today, it produces a variety of products, from lipsticks, face make-ups, eye, and nail products, which alongside other popular brands, sets the trend in international beauty and fashion.
Part B – Evaluation of Current Strategy
It has been reported that marketing communication consists of the messages and the related media to communicate to the market, such as using strategies related to advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, public relations, sales, sales promotion, and online marketing ( 2006). Marketing communication has a very important role in the success of a specific product and the company in the market. With the use of effective means of communication, such as those mentioned above, a company can successfully introduce a product to their target market.
Similarly, the Max Factor & Co. is also developing and improving their marketing communications strategies to effectively establish their new products in the market. One effective way for accomplishing this, is through commercials or advertisements. Its success not only relies on the fact that the brand name is already famous all around the world, but the fact that many famous celebrities use the product. In addition, the company also uses quotations or slogans to add to the brand of the product, and be remembered easily by the public.
With the case of Max Factor’s SK-II product, the company introduced their new SKII de-wrinkle cream with the help of Carina Lau, a Hong Kong film star. The product promised the public that it reduces one’s wrinkles by 47 percent and make one 12 years younger if used for 28 successive days. But unfortunately, this goal was not achieved, as a Chinese woman, named Lu Ping, filed a lawsuit against Procter & Gamble China. Lu Ping used the SKII de-wrinkle cream for 840 Yuan or US2 for improving her skin, but instead, the cream made her skin itch and ache. With this, Lu demanded a refund for the price of the product, and an additional of 1,000-Yuan compensation for mental stress and undisclosed amount for medical treatment. Due to this, the product was kept for further content investigation ( 2005).
According to the findings, SKII products contain excessive amounts of chromium and neodymium, the two metals essential for the making of cosmetics. In excessive amounts, chromium could cause skin disease, such as allergic dermatitis and eczema, which is very hard to cure. Neodymium on the other hand, can cause irritation of the eyes and the mucosa, and if inhaled, it can damage the lungs and the liver ( 2006).
With this controversy, the Chinese government investigates how these products were contaminated during its production in Japan, for the presence of the two metals in cosmetic products is prohibited in China. Due to this incident, public anger has become a public relations headache for Procter & Gamble, underlining the challenges foreign firms face as they contend with increasingly discriminating consumers ( 2006). Four of 13 major department stores in Beijing and some shops in Hong Kong removed SKII skincare products after the detection of banned heavy metals in the nine Japanese beauty products, and even found that other several famous products contain higher levels of chromium, namely Clinique, Estee Lauder, Christian Dior, Max Factor, Lancome, and Shiseido ( 2006).
The elements of marketing communication are present in this incident, and in fact, the company has been successful in introducing the SKII products in the market. The company has been successful in their advertisement, for aside from endorsing the product with the support of Carina Lau, the public became interested in using the product to remove their wrinkles in a short span of time. Aside from effective advertising, the company also is successful in building a brand image for the product, for the SKII products are under the bigger brand name, Max Factor, which is also under a big company. The packaging of the product is also important, and is obviously very effective, for many women were able to purchase it. Generally, the elements in marketing communications were used effectively. However, the incident was just an effect of the key communications issues encountered by the company.
The first issue to be encountered is the promotional elements of marketing communication, which includes the disciplines of advertising, sales promotion, marketing public relations, and personal selling, direct marketing, sponsorship, and Internet communications (2006). As mentioned earlier, this issue determines the success of the product in the market, for this position the company’s products and services, and the channels for delivering those messages, including print media, interactive media, and public relations. It is therefore important for the company’s brand identity, or the sum total of the consumer’s experience and perception of a company and its offerings ( 2006).
Another issue encountered is the promotional management in terms of strategy development, implementation and evaluation ( 2006). This issue becomes a problem for the company must make sure that their project will be implemented properly and efficiently in the market. In the case of SKII, the implementation, evaluation and strategy development was successful. The problem only came with the discovery of the excessive metal contents in the cosmetics, which affected the skin of many women in China.
Another issue is the behavioral foundations of marketing communications and promotion management including semiotics, consumer behavior, attitudes and persuasion, source and message factors, diffusion of innovation, and adoption ( 2006). This issue is important to evaluate, for the success of establishment of the product in the market depends on the demand of its consumers. With the SKII incident, the demand for the product is good, so it was easily established in the market. However, its downfall was brought about by its failure to meet the standards of its consumers, and even degraded them. The last issue is the effects of changing environmental circumstance on marketing communications and promotional strategy, such as budget allocation, messages, and media vehicles adopted 2006). It is also useful to evaluate this issue, to properly allocate resources and efficiently fund the project, for effective implementation.
Part C – Proposed Marketing Communications Strategy
A. Marketing Objectives
It has been reported that there are five general promotion objectives to choose from, and these five promotional activities should be compatible with the mission and objectives of the company, as well as their competitive and marketing strategies of the business ( 2005). These five promotional activities are, to provide information, to increase demand, to differentiate the product, to accentuate the value of the product, and to stabilize sales (2005). From these set promotional objectives or activities, the company can use the different types of promotion, which includes advertising, direct marketing and public relations. Given the incident concerning the Max Factor SKII issue, it would be best to make a marketing communications plan on how to continue with the promotion of the product. Using these promotional objectives, the company can start at providing information to their consumers, of the improvements in their products. By providing the correct information, the company can regain the trust of their consumers and therefore, increase their demand for the product. With the provided information and increase of demand, SKII products can be differentiated and distinguished from the market, as a high quality product, which would accentuate its worth from the loyalty of the consumers. These in turn, will lead to the establishment of the new improved SKII products in the market, which would stabilize the company’s sales.
Corporate objectives include customer loyalty, profit, market leadership, growth, employee commitment, leadership capability and global citizenship (2006). By having a good marketing plan, which is improving the products of SKII, the company can obtain customer loyalty, for consumers will be provided with the highest quality of products, which would entail a good profit for the growth of the company and for the company’s shareholders. Improvement of the new SKII products would also allow the company to develop market leadership, and continue to provide useful and significant products, and expand to new areas of development. These objectives would enhance employee commitment and increase performance and productivity of the company, and contribute to its mission to serve globally. The company can propose trainings, employee and systems development programs to provide with the company the appropriate information systems and good leaders for achieving excellent business results.
The marketing objectives of SKII must include its promotional and corporate objectives mentioned, in accordance to the brand’s mission and vision to attain company profit and market establishment. The market objectives should cover the target market of SKII, such as women ages 20 and above. These would also cover marketing communications objectives that would require the company to use different types of communication media to effectively relate to the public. This includes the use of advertising media, such as billboards, printed flyers, radio, television, magazines, newspapers, posters, and the Internet. Using these forms of media is effective for many individuals are exposed to them, and are able to gather or obtain information from them. Most of the time, citizens are exposed to these forms of media, which greatly influences their decisions, such as in creating brand loyalty. In addition, the forms or types of media are responsible for producing the brand image of a specific product. With an effective brand image, many consumers are encouraged to continually purchase and support that product, for with the proper use of advertising; the target market of the company can easily be reached. In relation to the products of Max Factor and Procter & Gamble, their products are continually being supported and purchased, for many consumers believe that their products offer a high quality and an affordable price. This is because, nowadays, consumers have developed the trait of being able to demand from their producers and the desire to obtain the value of their money. Furthermore, the SKII brand can also use direct marketing strategies, such as direct mails or emails for new product information and promotion. The company can also plan to promote their products through public relations strategies, for easier dissipation of information and relate to their consumers simultaneously in large numbers.
B. Marketing Communication Mix and Strategies
It has been reported that there are two kinds of promotional strategies, namely, the “push” and “pull” strategies, where the “push” promotional strategy makes use of a company’s sales force and trade promotion activities to create consumer demand for a product, while the “pull” promotional strategy requires high spending on advertising and consumer promotion to build up consumer demand for a product ( 2006). In essence, the “push” strategy gives the company the opportunity to “press on” the products to their consumers by the use of promotion, while the “pull” strategy gives the consumers the chance to demand the product from their producers. In accordance to these two concepts, the SKII brand must be able to use both strategies to be able to effect market success. As part of their marketing plan or objective, the company must first try to improve their product as a response to the issue raised by many Chinese consumers regarding the SKII products. This improvement must be followed by providing the public with the right information concerning the product, with the proper use of communication media. In their marketing communication plan, both the “push” and “pull” strategy must be aimed, for the effective use of these two strategies can determine the success of SKII products. The company must work hard to “push” the product to the market, and try their best to regain the trust of their consumers. This can be done by effective dissipation of information through different forms of media. Another way is to lure consumers by giving out promos or contests, which can be won by using the product, for most of the time, many customers would support a specific product for a corresponding price. Moreover, the company can also provide their consumers free skin consultation or free product trial for a corresponding number of days. These strategies would “push” the SKII products to their target consumers, which would somehow make the consumers realize the company’s intentions of quality service.
With the success of the SKII brand in “pushing” their product to the public, the company can now invest on advertising and promotions as their follow-up to providing their consumers with proper information. With good intentions, the company will be rewarded with increased product sales and profit. This result is the “pull” of the consumers to the SKII products. With these, the company can now see the “pull” of their consumers with their products, which now fuels the company’s power to produce and participate in the market. As a marketing strategy, the company must use the “push” and the “pull” promotional strategies effectively for a good business results.
C. Control and Evaluation
Control and evaluation is important for the company for these two activities enable the company to assess if they have achieved their goals, and for them to conceptualize new ones. The SKII brand company must have an annual plan control, which helps them gauge their performance in terms of their sales, market-share, expenses, budget, and customer satisfaction. An annual plan control can give the company the opportunity to reassess their plans, improve them, and make new ones. Another useful tool for the company is an efficiency control, which enables them to gauge what marketing and sales efforts are successful or are failures in the market. This gives the company the chance to evaluate their existing policies, to increase production and improvement. The company must also have a strategic control plan, which is responsible for the short-term and long-term marketing plans of the company. This plan must be able to assess the organization as a whole, its related institutions, the company’s strengths and weaknesses, and market-effectiveness. The company also needs a profitability control plan, which assesses the ability of the company to allocate resources. This is important, for money, time, and manpower must be allocated properly to be used efficiently in the company (2006).
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