Mary Kay cosmetics: Asian market entry

Résumé du document

Mary Kay Cosmetics (MKC) is an American company that deals directly with selling of cosmetics and toiletries products.

It has existed for 15 years since 1992. It is implanted in 21 countries and planning to market 4 or 5 new markets.

It is a “feminine firm” which promotes a strong philosophy of self fulfillment and woman charisma through the way of using and selling MKC products. Indeed, MKC proposes middle-line products, accessible for all American women, and promotes business opportunities for them… for both clients and beauty consultants.

Mary Kay Cosmetics focuses not so much on how much profit the company could make, but rather on giving women opportunity to make real, noticeable income while maintaining balance with family life. Using the direct sales model, consultants continually seek out new customers, but they present the products in customers' homes. Its estimated retail sales in 1992 are $1 billion. MKC sold a range of skin care, personal care, and cosmetics products through approximately 275,000 independent salespeople worldwide, known as “beauty consultants”.

In early 1993, the United States was still emerging from the recession of 1991-1992, one that was different from all of those preceding it. All of American business had undergone dramatic structural changes during the 1980s, and that shift was still in progress in the early 1990s. China had been conducting an economic experiment in its southernmost province and represented at that time the new Eldorado for American firms which were in bad shape.

In the early 1990s, Mary Kay Cosmetics was contemplating whether expansion into China and Japan would be beneficial for the company. The purpose here is to assess this question, as well as identify the key elements of Mary Kay's expansion strategy.

Extraits

[...] There are insufficient marketing resources. Therefore, it is planned by Dandurand, who heads the marketing group, to closely follow products development in subsidiaries, and provide marketing support, advertising, promotions, and continuous control of the quality and the image of MKC. Thus, a consistent policy is to be launched as for marketing. So, there is an obvious lack of efforts of adaptation to the local markets, which reveals certain rigidity from MKC. Is it due to the MKC's philosophy, which is considered as of date” by several markets, such as Canada, or is it due to an inefficient organizational structure? [...]

[...] Mary Kay cosmetics: Asian market entry Introduction Mary Kay Cosmetics is an American company dealing with direct selling of cosmetics and toiletry products. It has been in existence for the last 15 years since its inception in1992. It operates in 21 countries and there are plans to market these products into 4 or 5 new markets. It is a “feminine firm” which promotes a strong philosophy of self fulfilment and woman charisma through the way of using and selling MKC products. [...]

[...] Since they are already aware about the product they can credibly advise potential consumers. This creates a chain, which enforces loyal consumption. So this way of distribution is supposed to be a force. Moreover, at this point of the sales process, there are no obstacles due to the organizational structure, which is very simplified. Beauty consultants are moved by their possibility to climb the hierarchy and become sales directors, senior sales directors or even national sales director. This is a way for women to become businesswomen, to earn money, adjusting their time as they wish, with no temporal constraints (as for their children or general family life). [...]

[...] This method is popularly known as network marketing. In early 1993, the United States was still emerging from the recession from the period 1991-1992, one that was different from all of those preceding it. All American businesses had undergone dramatic structural changes during the 1980s, and that shift was still in progress in the early 1990s. China had been conducting an economic experiment in its southernmost province and represented the new Eldorado for American firms that were in bad shape. [...]

[...] The foreign competitors in Shanghai (Johnson & Johnson, Unilever) do not target the same consumers as MKC. The products launched in Shanghai will be extended to Guangzhou's and Beijing's markets. Therefore, we have planned to adapt a part of our products to the Chinese values and needs (whitening lotion), while taking advantage of MKC's strong and foreign brand to attract beauty consultants. Moreover, MKC won't use the usual party plans method, but will display its products and teach the Chinese women how to use them in beauty centres and also sell them in joint venture stores. [...]