Mary Kay Cosmetics

Asian Market Entry

A CCM Presentation

Group Members
   

Shivendra Jain Gunjan Grover Shivangi Nandwani Pushpinder Singh

AMITY INTERNATIONAL BUSINESS SCHOOL

Introduction


Manufacturer and Distributor of

    

skin care products makeup items toiletry items Accessories hair care products

  

Founded in 1963 by Mary Kay Ash Direct selling organization Success Mantra : motivating and constantly replenishment of its over 170,000 member sales force

History


1963 : MKC established 1971 : First international subsidiary 1979 : First MKC representative to reach $1million in sales 1991 : Wholesale sales : $500million

Problem Analysis
    

Weak international presence Lacks Adaptation International Sales : 11 % of total sales Need foothold in Asian market Opportunity for Growth
 

Japan China

Strategic Challenges


Successfully gain a foothold in a large and influential Asian Market Cultural Barriers (Clash of Cultures) Self Reference Criterion


 

Reference to ones own self (values/norms/beliefs/attitude/culture/management styles)

Political and Economic Risks

Japan vs. China

JAPAN
124 Million People Mature/Saturated Market Experience with Direct sales Low Growth Potential

CHINA
1.14 Billion People Little Competition Little Experience High Growth Potential

CHINA

Consumer Analysis
   

Population 1.14 Billion in 1992 75% of household income is disposable Women controlled family budget Urban Consumer
    

Average age: 32 Married One child Attracted to foreign brands Attracted to education

Cultural Differences
     

Skin Care vs. Make up Low Income Small Housing State Jobs MKC Part-time, 2nd job Lack of experience with Network Marketing

Plan of Action


Phase I
 

Establishment in China Adaptation of Product and Plan Build brand and awareness Focus on Growth through superb customer service Own manufacturing plant Diversify product line Expand

Phase II
 

Phase III
  

Business Plan


Suitable Product Mix

 

Core Line Asiatic Line

  

Affordable Price range Mid price Reward Incentives (for sales) Building Brand Equity through Product message
 

Skin Care Provider Employment Opportunities Word-of-mouth Media (Radio, print, TV) Investment in Education Skin care courses Product endorsements by Medical/Dermatologist/Celebrity

Building Product Awareness

   

Focus on Growth


Shopping Mall Party-Plans

  

Cart/counter rental Free make-over session Skin consulting

Shanghais Local Pageants



MKC Sponsored Cosmetics

HQs Local Seminars

 

Informational Recruiting

Conclusion : Chinese Market

 

Chinese Market Remarkable Growth Potential Keys to Success In China

  

Cultural Adaptation (Sales / Recruiting) Effective Ad Campaigns (Gong Li) Agility

Long-term Focus
 

Short-term costs Long-term Gains Commitment to the market

JAPAN

Consumer Analysis
   

Population 124 Million in 1992 Consumer Average age: 43 Agree with others opinions Affected by reputation amongst colleagues, friends, neighbors & recommendation by salesman Purpose to buy a merchandise
 

Practical use (low price) Ostentation of social status (high price)

Attention on precise finish than overall performance

Cultural Differences
  

LowLow-consumption and high savings society Good experience with Direct Marketing Exclusive distribution systems because personal relations, often decades old play important role in stocking products Difficult for new firm to get shelf space as compared to an old firm Unique buying behavior, buying motive, preference on merchandise and taste on design Advanced Internet environment Corporate systems structured for cooperative employee performance Chain of command

 

Plan of Action


Phase I
 

Establishment of branch office in Japan Adaptation of Product and Plan Build brand and awareness Focus on Growth through direct marketing (internet) Diversify product line Expand

Phase II
 

Phase III
 

Business Plan


Suitable Product Mix



add some modification to meet Japanese consumer's taste Ostentation of social status Internet advertising Search Engine Optimization Joining in Japan World Mall presented by Intelligence Bridges Product endorsements by Medical/Dermatologist/Celebrity

Building Brand Equity through Product message



Building Product Awareness

   

Conclusion : Japanese Market

 

Japanese Market Poor Growth Potential Keys to Success In Japan

  

Cultural Adaptation (Product / Marketing) Effective Internet Advertising Direct Marketing