mary kay cosmetics


MARY KAY COSMETICS: ASIAN MARKET ENTRY (A)  Group Case Analysis

QUESTION 1 : JAPAN OR CHINA?
         After voting between entering China, Japan, both, or neither from the perspective of Mary Kay Cosmetics, our group unanimously decided that the best decision was to enter China and refrain from entering the Chinese market.
After weighing the costs and benefits of each location(discussed in question four below), the general consensus was that the Chinese market offered a more promising environment due to its low costs, consumer demand, and government cooperation. The Japanese market, on the other hand, had high costs, a competitive, mature  market, and a government which enforces strict regulations. Ultimately, the group decided that the benefits in China outweigh its costs,while Japan proved to be too much of a risk for Mary Kay Cosmetics..

Question 2: KMC VS AVON ( International Market)

               Mary Kay Ash was an entrepreneur and a philanthropist; she started her business from a tiny store in Dallas, Texas, with five products and one big dream. That dream was to inspire women to transform their lives, and in doing so, help other women transformtheir lives – because One Woman Can. One Woman Can transform her life, become her most beautiful success and touch other lives. Today MKC, with more than 2.5 million Independent Beauty Consultants, offers more than 200 premium products in more than 35 countries around the world. Through all the milestones, one constant has remained: innovation. For 50 years, Mary Kay has led the way in giving womenwhat they crave. Mary Kay has believed in the power and importance of social responsibility, she has led the way in showing that beauty can enrich women’s lives.
                    Mary Kay Cosmetics (MKC)  has been quite successful in the domestic markets (target market: women). They have an annual sale of around $890 million in the U.S; out of the estimated $5 billion direct selling cosmeticsindustry - a 17% market share. The company achieved this success by positioning itself as an organization that embodies ideals and values that women can aspire to become. Their strategy of personifying the company as a woman itself has been really successful in increasing sales and establishing presence in the domestic market, but MKC  has not been able to transfer this success tointernational markets. The company has been selling products overseas for over 15 years, and the share of international sales have been at a dismal 11% of total sales compared to its rivals Avon at 55%.
      To understand the failure of MKC in replicating its domestic success in foreign markets, lets understand the complete process of MKC to be an internationally successful market. MKC is really good withencouraging a very strong entrepreneurial culture. MKC attracts women who are not only interested in looking glamorous and teaching others on how to take care of their skin, but also those who are interested in being independent, successful, and having their own businesses. MKC provides these women with a platform to be a successful role model along with having unlimited opportunities. Thisphilosophy of self-improvement, self-esteem enhancement attracted an active number of "beauty consultants" that allowed MKC to reach its current success in domestic market but they really haven’t been able to successfully transplant its domestic success to foreign markets. The variables that have inhibited MKC’s success internationally include lack of adaptation of  MKC’s strategy, pricing, mode ofselling, etc. to local markets, entering markets without proper demographic, psychographic, and macro analysis of various countries.
        Avon, one of the primary competitors of  MKC approached internationalization by giving increased autonomy to its subsidiaries. It allowed its subsidiaries to modify products according to local needs, provided them with significant decision-making authority....