M.A.C. Cosmetics

M.A.C. Cosmetics

Saturday, September 18, 2010

Week 3 - Ethics and Social Responsibility

M.A.C cosmetics has a great position on corporate and social responsibility. The public image of this business is supported, due to many different surroundings. M.A.C. is "cruelty-free" and does not test its products on animals. They use simple black and white (recyclable) packaging and they encourage Recycling with the "Back-to-Mac" programme. Customers are given a free lipstick of their choice with the return of six empty containers. The company offers good prices compared to other 'big name' companies without any false promises such as miracle (age reducing) creams. M.A.C. is upfront in promoting its support of the fight against AIDS, with its popular lipstick -'Viva Glam,' 1992 (which also come with a condom) donated to various AIDS organizations. Nancy Mahon doesn't consider herself a glamour girl, but she believes in the power of lipstick -- Viva Glam shades 5 and 6 in particular. Mahon is a senior vice president of MAC Cosmetics and executive director of the MAC AIDS fund, which last year donated $20 million to programs in 57 countries, including South Africa, the Caribbean and the United States. The non-profit program makes MAC the third-largest corporate donor to AIDS-related causes, and is funded entirely by sales of MAC's Viva Glam lip products. Unlike other business philanthropy models, 100% of the $14 suggested retail price tag for each lipstick goes to the AIDS fund -- even retailers are expected to forgo their margin, Mahon noted at a recent Wharton Leadership Lecture. She told students that it is important for a company not only to be good at business,but also to treat employees well, conduct business responsibly and behave as a good global citizen. "It's one thing to sell lipstick," Mahon said one associate told her. "It's another to sell lipstick and make a difference."

The company chooses the Viva Glam celebrity faces based on their ties to the cause. So far, the biggest success in terms of sales has been former Baywatch star Pamela Anderson, in part because the actress was so open and honest. "She got up and said, 'I have hepatitis. No one should be ashamed of getting an illness." Since the fund's inception, the company has given more than $128 million to various AIDS-related projects, including $4.5 million for a prevention and treatment initiative in the Caribbean, $100,000 for a needle exchange program in Washington, D.C., and almost $200,000 for a prevention and education project aimed at youth living along the Mexican border who are at increased risk of infection. The commitment to the cause keeps the company's customers coming back for more MAC products -- and employees from leaving, said Mahon. "The average [employee] retention rate in the industry is 30% and we have an 80% retention rate," Mahon noted. "When they're asked why they stay, one of the top reasons is the AIDS fund." Customers, too, pay attention to the beliefs behind the corporation, she said, citing a study that found that EBay purchasers were willing to pay up to 8% more for an item if they believed in the cause the money supported. "Customers care that you do good in the world." Recently, M.A.C. introduced the "Kid's helping Kids" which, with the sale of greeting cards, painted by the kids, will be donated to pediatric organizations.The M.A.C. PRO Program is provided to professionals in the industry. An annual fee must be paid for this service. Cosmetic professionals and students receive discounts on purchases.

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