Marketing Audit Report: FM Cosmetics Group - Strategic Analysis

This report presents a comprehensive marketing audit of FM Cosmetics, a fast-growing company in the perfume market. The audit begins with a macro-environmental analysis using the PESTEL framework, evaluating political, economic, social, technological, environmental, and legal factors. It then delves into the micro-environment through Porter's Five Forces model, assessing competitive dynamics. An internal analysis examines FM's structure, strategy, shared values, and skills. A SWOT analysis synthesizes strengths, weaknesses, opportunities, and threats. The report explores FM's objectives, mission, and vision, along with its strategic decisions in segmentation, targeting, positioning, and branding. The marketing mix is investigated, followed by an examination of the company's budget and critical success factors. Finally, the report concludes with recommendations for FM Cosmetics to strengthen its market position, particularly within the UK market, addressing challenges and capitalizing on opportunities within the competitive beauty and cosmetics industry.

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FM Cosmetics Group[Document title]
FM Group l.t.d.
1. Introduction
2. Strategic Audit
2.1 MACRO
2.2 MICRO
2.3 INTERNAL
2.4 SWOT
2.5 CONCLUSION
3. Objectives MISSION/VISION
3.1 CORPORATE OBJECTIVE
3.2 MARKETING OBJECTIVES
4. Strategic decisions
4.1 MODELS
4.2 OPTIONS
4.3 STP
4.4 BRANDING
5. Tactics MARKETING MIX
6. Controls
6.1 TOOLS TO CONTROL IMPLEMENTATION
6.2 CRITICAL SUCCESS FACTORS
7. Budget
8. Recommendations
9. References

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FM Cosmetics Group[Document title]
1. INTRODUCTION
This report has the aim to conduct a Marketing Audit of FM Cosmetics. It will begin from a Macro
Environment analysis, to the Micro and finally make a deep development of their Internal
Environments. Additionally an evaluation of their strengths, weakness, opportunities and threats
will be provided with a conclusion of audit. The company main objectives will be researched and
presented: Mission and Vision. Also the description of these report will analyse the strategic
decision taken by the company, in specific segmentation, targeting, positioning and branding.
Beside it a deep investigation of the company’s marketing mix will be provided; and to conclude
the company budget and critical success factors will be examined followed by a delivered
recommendations.
FM Cosmetics is based in Poland; and it is a very fast growing company in the perfume market. It
has been created by young people, which is why they are able to respond to needs and wishes of
their customers and distributors quickly. FM offer large range of fragrances of all types: fresh,
flowery, oriental, woody, and fruity and many more. Their primary goals are, to always have
available products at the best possible prices, to focus on the customer and distributor satisfaction
by being able to satisfy customer’s requests. They offer their products branded in the name of
Federico Mahora, FM and Aurile
Since 2004 FM Group has enjoyed rapid expansion in over 50 countries. Fragrance for the
perfumes is created by the one of the biggest companies in the world with the 100 years tradition
which is growing up very fast and has its bases in Europe, Australia, United States, China and
Brazil. In 2004 FM Group launched an exclusive range of fragrances and complementary
products. This young and exciting company has behind it a wealth of experience in perfume
creation, marketing and direct sales and has in a short amount of time already expanded into more
than twenty countries. FM Group UK office opened in January 2006.
The audit will provide the necessary information that will help to develop their reason of the
incapacity of holding a strong position in UK.
2. STRATEGIC AUDIT
2.1 Macro
Few brand has launched an online prescription skincare service, giving patients access to licensed
dermatologists. The rise in online consultation services presents more opportunities for the beauty
category.”(BPC – UK, June 2015).
PESTEL analysis is an essential management tool which assesses the macro-environmental
factors. The analysis will helps decision-making and other management processes. It studies
many elements under the following factors which are; political, economic, social, and
technological.
POLITICAL:
Legislation for the nation and the quality of products and services are changing, and they are
introducing new instructions programmes for the beauty fields. Moreover the government is
introducing higher taxes for business, and this is badly affecting the business environment. The
consumer goods supplied, in the market meet the general safety requirements. If a particular
cosmetics or skin product is found to have breached the requirement. Firstly conviction penalty, an
imprisonment of one year. (Legislation.gov.uk, 2016).

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FM Cosmetics Group[Document title]
We believe the FM Group Buyers Club offers the perfect solution! It’s only shopping from home
instead of the Supermarket, and sharing those benefits with people you know it is really easy.
ECONOMICAL:
Mintel consumer research 2015 shows that high class customers aged 16-44 tend to buy
expensive and branded beauty products (Mintel, 2016). The economy in UK significantly improved
by 2015. There is an increasing cost of cosmetics with a decreasing personal income of people.
However middle class customers are still purchasing wisely fancying the high quality luxury
products (Mintel 2016).
SOCIAL
Nowadays people tend to use make-up a lot for outing, to look more presentable and change
theirs looks. FM creates a good value gift sets for both men and women. However the greatest gift
of offers comes on Christmas period, New Year season, Mother’s Day, Valentines and summer
deals. Researches in cosmetics show that customers switch to organic and natural cosmetics
(Mintel 2016). However which FM is dedicating and that will also help to build a firm position in the
market.
TECHNOLOGICAL
According to Mintel 2016, over 19% of customers have researched about desired products online
before purchasing the product. The advancement of technology has created opportunities for FM
to reach their customers. Many companies also invest more in mobile applications using any tools
of integrated communications to promote the band (Mintel 2016). The use of the internet is
promoting FM to get the opportunity for customers to notice them through online. In additional is
helping FM to improve business on both operating and promoting, and increasing sales and the
presence in the marketing.
ENVIRONMENTAL:
Nowadays the environmental protection issue has become a very delicate topic, in where more
amendments in environmental law are presented from 2015 (Legislation.gov.uk, 2016). However
has been able for FM to introduce the natural wellness skin care such as Aloe Vera, Beta-Glucan
Active, Skin Lab, Honey Collection; and other nutrition wellness like infusions, natural coffee, tea
and functional coffee. (uk.fmworld.com)
LEGAL:
Health and safety regulations, safe packaging, labelling regulations (Gov. 2016). Also all EU
operating companies has the necessity to adopt new regulations: "changes in fragrance allergen
labeling laws; for this reason it is suggested that FM should set strict selling and distribution
regulations in order to prevent any damaging consequences for the brand itself.
2.2 MICRO
PORTER’S FIVE FORCES MODEL
The MIRCO environment consists of factors in an organisation that affect its performance and
more the decision-making. These factors include customers, competitors, general public, suppliers
and distribution channels. Therefore Porter`s Five forces model developed by Porter will be used
to analyse the company competitiveness.
NEW ENTRANTS. The beauty and cosmetics industry has a low threat of new entrants due to
high entry cost, stricter from the Government and also huge capital for quality product, costly

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FM Cosmetics Group[Document title]
research, development and manufacturing process, tough competition (Mintel, 2016). Avon and
Arbonne are two main competitors in terms of volume of sales and style of selling
(Bloomberg.com, 2010).
SUBSTITUTES. The threat of substitutes is vast as the industry is highly competitive: direct selling
companies, shops, non-organic companies and online sellers can be considered substitutive. A
resolution for FM to maintain his brand name should be based on a good customer base (loyalty)
and innovating products will allow to remain well-founded.
BUYERS. There are many cosmetic products that meets the needs of different market segments.
However, FM should concentrating in developing products which meet the specific needs of this
market segment and focus on the neglected population segment, In order to achieve long term
profitability.
SUPPLIERS. The bargaining power of suppliers in the cosmetics industry, has a low bargaining
power of supplier, due to the high number of the diverse products.(Diller et. al., 2006: 33-36), For
these reason is the consumer that has the power to bargain, because of the influential they
possess in the market.
2.3 INTERNAL
STRUCTURE
FM has been created by young people, that are able to respond to needs and wishes of their
customers and distributors quickly, and according to the Marketing Plan employee collect points
for purchasing certain FM GROUP Products. You have to remember that you collect points from
the first till the last day of the month and every month you start from the beginning
SYSTEM
FM do not spend money on advertising on TV, in newspapers, magazines, or on billboards –
which adds to the cost of the products you normally purchase in High Street shops.
STRATEGY
FM Group do not pay celebrities to endorse their products – but prefer to rely on satisfied
customers to recommend them to others. This is why FM can offer its customers a range of top
quality products at prices they can afford. (www.networkmarketinghq.co.uk).
SHARED VALUES
Extra costs are not added by trading through wholesalers and retailers – our products are shipped
directly from the Company to our Distributors or their customers. (www.fmcosmetics)
QUALITY AND VALUE
FM manufactures its products in huge, modern, state-of-the-art premises using machinery
especially custom-made for their high speed processes – this ensures that they keep their costs
down and they pass these savings onto their customers. FM’s packaging is classic, yet simple –
therefore the customer is not paying for fancy, bespoke, bottles and boxes. (www.fmcosmetics)
SKILL
By recommending and training new business partners to build their business. If they manage it
appropriately they are able to gain a very large income.

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FM Cosmetics Group[Document title]
STAFF
FM Group do not employ teams of demonstrators in departmental stores – they teach their
distributors how to introduce their products to customers. (www.networkmarketinghq.co.uk).
STYLE
FM Group, began the Independent Distributor Model of selling their products in 2004 and from
2004 until now they have been constantly adding to and improving their product ranges. Back in
2008 there was only the Fabulous Fragrance range but now in 2013 they have the benefit of a
World Class Make-up range and a comprehensive range of products for use in and around the
home too. So it’s only just very recently that it has become possible to offer our great products on
a Discount Buyers basis because now we have so much more to choose from!
(www.fmcosmetics)
2.4 SWOT Analysis
STRENGHTS
 Provide natural products for customers,
 Maintain good relationship with customers.
 Possibility to be flexible for new services
 Attractive prices
WEAKNESS
 Other cosmetic companies have already developed a relationship with customers.
 Do not have a physical shop
OPPORTUNITIES
 The finding of lead in cosmetic products created an opportunity for FM to show consumers
that the products are natural and organic.
 More beauty cultural programmes that can be seen in TV programmes
 Increasing employment
 It covers all needs of all ages, product and service expansion
 Innovation
THREATHS
 Few big companies and a large number of small companies would be fighting for market
share in the global market.
 In an unstable economy, people will reduce their expenses in order to save money for
future use. This consideration leads to decrease their purchase intention on inferior good
such as cosmetics products.
 Increasing cost of other equipment
 Increasing market demand for more treatment
2.5 Conclusion
FM is highly affected by external factors, and those which are negatively affecting their revenue
are political and legal, on the other hand those that are positively affected consist on the
environmental, technological and the social factors, that is been able to protect the company and it

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FM Cosmetics Group[Document title]
has made it possible for FM to developed new successful products. The internal analysis shows
that has a profitable structure. The staff are quite satisfied with the establishment of FM
progression into the industry.
3. OBJECTIVES
The objective are to maintain a positive steady growth in each month and keep on maintaining the
existing customers, in addition they have the capacity to win always new customers.
Mission
Their mission is to create products, which will have the possibility to be shared committed with a
lifestyle that will give customers financial freedom. To high-quality skincare and cosmetic products
to women who want what goes on their bodies to have as high a quality as what goes in their
bodies. It will strive to be the leading producer and marketer or personalized, make-up brands for
consumers of colour who are searching for flawless make-up and convenient make-up.
Vision
Their main vision is to be the global leader of Multi-Level Marketing and be number one for
fragrance sales worldwide. They are aiming to work ethically with people driven by the spirit of
success. (www.networkmarketinghq.co.uk)
3.1 Corporate Objectives
FM Cosmetics has the challenging ambition to go across national borders, is aiming to change the
world for the better and is concentrating in promoting the spirit of enterprise. FM objective is to
make money by generating profit from selling the products. It is all about the commission you can
earn through generating personal points and those of your business partners; for them to be able
to build and manage an effective sale group. It should be noted here that FM provides training and
meetings to all staff. Additionally FM is concerned about the healthy lifestyle that their customers
should live. (www.networkmarketinghq.co.uk)
3.2 Marketing objectives
FM believes that they products should always be available at the best possible prices; also should
focus to gain the total customer and distributor satisfaction. And lastly they are aiming to
concentrate on giving always the best satisfaction to their customers’ requests.
(www.networkmarketinghq.co.uk)
4. STRATEGIC DEDCISIONS
Marketing strategy can be defined shortly as “the means an organization uses to achieve its goals”
according to Craven et.al (2009). It is important for a company to study its marketing situation
carefully so that it can adapt strategies to meet new marketplace challenges and opportunities.
(Kotler 2012, 90.) According to Johnson and Scholes (2005), a holistic strategic marketing plan
consists of three stages: Strategic analysis, Strategic choice and Strategic implementation.
Strategic analysis helps marketers understand the strategic position of the company in terms of
internal competencies, external environment and stakeholder’s influence. Based on the analysis,
strategic choice generates strategic options for evaluation. Finally, after weighing all the options,

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FM Cosmetics Group[Document title]
strategic implementation plays the role of being the translation of strategy into actions with tactical
plans. Since the outcome of this study is providing case company with strategic proposals, FM will
develop suggesting directions.
4.1 Models
With product differentiation strategy FM have developing different blends of fragrances and styles
to match customers’ needs in international markets; they have focused in developing a different
durability to meet customer’s needs; and also been concentrating in producing a distinct
packaging and limited edition of their products. Therefore in UK FM should develop a new market
to strengthen the market position, which could keep the product and the service differentiated, in
order to gain a unique brand loyalty. On doing that FM will need a consist innovation that will be
able to be competitively and strategically strong.
4.2 Options
Although the cosmetic market in UK is known, it still needs market research to learn and find the
right price strategy for product (www.fmcosmetics). Having identified that and its acceptability to
the UK consumers it is then possible to estimate the potential sales which could be active in UK.
This is showing us how much financial resources FM needs for future investment, and if it can be
financially workable.
4.3 STP
Market segmentations an essential step and can make a huge impact on the success of the
marketing plan. The key is that the marketing plan can be profitably adjusted to recognize
customer differences (Kotler & Keller, 2006). STP is fundamental in understanding marketing and
the strategies of the services.
Firstly FM has many diverse market segments, which are all the range of cosmetics, but precisely
it looks accurately at perfumes and fragrances.
A) Women: looking forward to always look beautiful with a combination of a nice fragrance and
very comfortable on having their shopping online or through catalogue.
B) Men: looking forward to look clean and have a nice aroma and used to convenient shopping
online.
C) Children interested on those fruity fragrance, and always demanding of it.
TARGET MARKETS
Involves deciding on the segment to serve and the best action plans to reach the identified
segment. According to Abell (1980) the firm faces; selective specialization, product specialization,
market specialization, full market coverage
FM looks forward to Young women and men between 18-25 who are from students or recent
graduates. They are energetic, like going out with friends, follow movies theatres as well as
concerts. Also women with successful career who need professional make up to cover flaws on
their body, that dressed up every day when going to work. They are from medium, upper medium
income Open minded that pays attention to self-development.
Perfumes professionals such as perfumes artists, hairstylists, models, photographers. Perfumes
and brushes determines the quality of their business. They follow up latest trends and new
launches products

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FM Cosmetics Group[Document title]
The most appropriate target has to be considered, and the main factor is the ability that the service
will possess to successfully compete with other competitors.
POSITIONING
After defining the market segmentations and potential groups to target, the next step, is to position
the company’s offers in the mind of consumers successfully. FM needs to send a messages that is
“simple, direct and that resonate with the consumer’s needs” (D. &. Jobber 2009, 122). The point
is to keep the company’s brand name automatically pop up as a top of choices.
FM offers the best fragrance to all ladies and gentlemen, students, creative professionals and
many consumers around the world; so it will have to create a unique and superior quality to their
products, for them not to look obvious.
4.4 Branding
After developed the positioning strategy, the suitable products needs to be designed and
developed at a suitable price. Once all these targets have been processed, after a period of time
and on a regular basis, the firm needs to revisit the performance of the products in order to
reassess and look for new opportunity.
5. TACTICS
The idea behind integrated tactical mix is to create the “marketing multiplier effect” (Frog Dog,
2012). FM will develop a tactical marketing mix, and they must ensure that there is a logical
connection between each medium and that messaging and branding are consistent across all
activities. They create products which can be trust; offer fair business principles; work together in
an atmosphere of mutual trust.
Marketing mix (7P)
FM is expanded in more than 50 countries, but the beauty supplied store in UK is located in
Neasden London. All orders are made by the various consultants immediately they arrive to the
main office in London and then distributed to different address. When all orders arrive to the
location of distribution, most of the time they meet the consultant to discuss few issues, and
sometimes the consultant becomes a mediator between the distributor and the FM warehouse.
(www.fmcosmetics.com)
FM has 7 type of product range: Fragrances (for him/ her/ youth), body care, hair care, make up,
home products, wellness nutrition (tea and natural coffee), and pets products
The prices variate depending on the product, and the most expensive product range are female
line about skin care and anti-age treatment (from £3.99 to max £50) (www.fmcosmetics.com). In
every season FM gives difference offers and promotions and also creates gift set (from 10% to
50% promotion).
Referring to People, the employees are the main part of the success of it. FM creates events and
training to motivate and teach their teams. They have become more qualified and well trained
employee, and this brings the company service into a higher standard. (www.fmcosmetics) FM
distributors are building their customers network by also making the service personalized to satisfy
each customers.
6. CONTROLS

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FM Cosmetics Group[Document title]
All the strategy must be controlled, deeply check and followed, to review and measures the
performance because the company has to track the activities to ensure that time are used
according to the plan and subsequently amend and improve the various issues. Also analysing the
sale and evaluate the profitability of the product brings to an excellent level.
6.1 Tools to control implementations
FM simply uses the Multi-Level Marketing as a system for advertising and selling products, based
on numerous consumer recommendations as well as on creation and management of sales
groups (www.networkmarketinghq.co.uk). In this specific case the person in charge has to
consider the financial resources. Which in this case are those employees’ owners that have
dedicated their time for the advertisement, and are motivated to develop the team work. Through
few analysis the service becomes able to maximise their performance, through group
differentiation. It also uses a series of possible services to attribute and combine it.
6.2 Critical success factors
The fundamentals for a successful factor must have a strategy to serve as the foundation for
marketing plan. Everything must tie back to support the strategy. This is the only way to stay on
track and develop an effective plan. FM share knowledge and products; care for each other and
other people, as well as for the environment we live in and the future generations to enjoy.
The strategy that FM has been focusing on is to offer “consumable” products and have global
positioning. Mainly FM is having concern about the health and wellness of the population by
production product that will help to benefit their customer’s lives.
(www.networkmarketinghq.co.uk).
7. BUDGET
According to the annual reports of FM in 2015 despite an extremely competitive marketplace, they
were able to maintain a strong client base and exceeded the new business sales targets. On top
of this very positive outcome. All in all, it was a tremendously successful year. The combined ratio
of 85.3 percent was exemplary for the third consecutive year, and the combination of strong
performance and investment results increased the remaining by 3.8 percent to 7.62403 GBP.
8. RECOMMENDATIONS
Finally FM Group in terms of short term, they have been able to developed employee attitudes and
increases positively the service of the company evaluations. A very good recommendation will be
to focus more on the industry process, the evolution of the brand and mainly to be able to
introduce an effective and positive etiquette to the product especially their fragrances, for the fact
that it’s they’re main selling product.
Regarding the Long term, the Digital Marketing, mobile app and tracking on website should rise
more awareness and be able to take an unbreakable position in the market industry.

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9. REFERENCES
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Democracy. The Theory and Practice of Legislation, pp.1-3.
Fmcosmetics.co.uk. N.p., 2016. Web. May 2016.
"FM Cosmetics Reviews UK – Good MLM Opportunity?". www.NetworkMarketingHQ.co.uk. N.p.,
2014. Web. May 2016.
"FM World United Kingdom - Registration Form". Register-uk.fmworld.com. N.p., 2016. Web. May
2016.
Mintel Reports: Academic Edition (Mintel Oxygen). (2010). Choice Reviews Online, 47(11), pp.47-
6023-47-6023.
"Skin Lab - Products - FM GROUP UK Official Website - FM WORLD Operates Within The FMCG
Industry Under The Multi-Level Marketing Business Model". Federico Mahora FM World. N.p.,
2016. Web. May 2016.
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Librarianship, 21(1), pp.79-82.