Make Up Art Cosmetics ( M.a

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Make-up Art Cosmetics (M.A.C) is a cosmetics brand that was created in Toronto and now headquartered in New York City as a part of the Estee Lauder Cosmetics. The cosmetics manufacturer was established by Frank Toskan, make-up artist and photographer, and Frank Angelo, a chain of beauty salons owner in 1984 in Canada. The founders of the company realized that there was a lack of professional make-up products in the makeup market that will stay untouched on the model’s face without decolorizing under the fierce environment of studio lights and perspiration. Thus, they decided to create cosmetic formulas that would fulfill their professional needs. In the beginning, the makeup line products were only available for professional makeup artists…show more content…
Lack of advertising does not affect the change in demand for the brand’s products because consumers trust word of a mouth more than they trust advertising; however, there is one exception that will be described.
M.A.C is a part of the cosmetics industry in a market economy. The firm is in a monopolistically competitive market because the barriers to entry are relatively low and there are similar substitutes for M.A.C. products. However, this is only true for the makeup market as a whole. For example, a small firm can pop up from an individual using beeswax and color dye in her kitchen to enter the market. Although this is the case, to reach the level of high-end makeup brands that M.A.C. is at, a firm needs factories and massive quantities of products for manufacturing. The high-end makeup market is still monopolistically competitive but it is the prices do not reflect supply and demand and there are barriers to entry or exit the market.
M.A.C produces luxury cosmetic goods and firm’s main competitors include such big companies as Chanel, Dior, Lancome and NARS. Most of their competitors’ prices are set higher than M.A.C’s ones. For instance, the average price of a foundation costs $45 compared to $30 in M.A.C. The brand’s idea is to produce affordable professional makeup. The lack of advertising, free products promotions and plain packaging allows M.A.C to keep their prices down.
According to the NPD Group, M.A.C sells annually more
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