Mary Kay Production Case Essay
Mary Kay Production Case
Question # 1
Mary Kay products have been seen to sell in more than 35 markets expanding across 5 continents. Mary Kay’s sales force exceeds 2 million globally with potential markets such as the Indian and Asia- Pacific areas that represent extensive growth opportunities. Mary Kay is focused on expanding into the Indian Market, due to its large population and market size. With the large population of middle class growing to a total of 500 million individuals will give Mary Kay the opportunity to build their brand and attract this demographic of consumers. Amongst the population that is averaging at 26 years of age consists of a growing number of women seen as highly optimistic candidates who have contributed to an increase in consumption of cosmetics. Individuals of India have become focused on the need to be well groomed, stylish and good looking. As a result of this knowledge, senior management of Mary Kay Inc. has seen great potential and will address the business aspect of building a brand, building a sales force and creating a supply chain to create exposure and extend the brand in the Indian Culture.
Repeat question 1
1. Outline the international business aspects of Mary Kay’s presence in India.
China accounts for the largest sales revenue outside the United States, representing about 25% of annual Mary Kay Inc worldwide sales. Part of the international success in china has been attributed to the company message of female empowerment and femininity that resonates in China, a country where few opportunities are provided to start your own business. Mary Kay global independent sales exceed 2 million. Its presence in India is seen heavenly through the introduction of its products in a mass market. India is a growing class where the population is young and optimistic. There is a growing number of working women who have provided with the boost of sales where the majority of the middle-class women exist in. India is a potential growth market which is in the “growing stage”. India consumption of cosmetics is very strong as women want the latest international cosmetics. The strong growth of imported cosmetics has made a major impact in the India market. The growth of international products in the Indian market has attracted motivated customers. India perceives foreign brand as a superior quality.
Indian market wants variety and different types of products. The total size of the Indian retail beauty and cosmetics market is growing rapidly. The growth rate of products introduced in India reflects an increasing demand for beauty care products in India. Indian consumers look towards international products as lifestyle enhancement products. With the exposure to media, Indian consumers are moving on to cosmetics product. Around 65% of the company independent sales representatives reside outside United States. Mary Kay entry to the market will include current analysis of existing sales force and consumer preferences. This will help Mary Kay entry to India as the brand position and product mix will be used. Mary Kay will needs to have good planning and maintaining consistent following up with the market trends, to expand in the Indian region.
How do suppliers of hair care products in India differentiate their products? What is unique about Mary Kay’s pricing approach? Majority of the products in India are differentiated through the specific ingredients put inside the shampoo. Products with specific benefits such as Ayurvedic or medicinal ingredients fragrances are introduced. Shampoos including avocado and Shea oil to specifically appeal to women who use oil to nourish their hair. The shampoos are based on the consumer preference and what kind of fragrance they prefer. Mary Kay pricing approach is the mass-tige approach. This is a very unique way of saying that their approach is downward brand extension. This is positioned as a major strategic market with high growth potential centered in middle-income part. It is primarily focused on expanding in the Indian region.
When analyzing Mary Kay’s business strategy, it is relevant to understand the concept of direct marketing. Direct marketing is considered a channel form of advertising which enables businesses to communicate straight to the customer. This strategy eliminates the middle man throughout the distribution channel. The direct marketing messages are designed to accentuate focus on the customer, data and accountability. Mary Kay business model is built completely around this strategy. “The company’s approach to direct selling employs the party plan, whereby independent sales representatives host parties in a customer’s home to demonstrate and sell products.” (pg. 150) Looking into the Indian market, Mary Kay can foresee potential into expansion. Mary Kay has the ability to introduce their products to a large population and market size. By attracting this population can increase employment in the country. Mary Kay has also been very successful in China, which has a similar size in population and market size. If Mary Kay is able to replicate the success in China there is huge potential for India based on the market size.
The advantages of direct marketing of cosmetics when taking a product offering concept is based on the control of price, and the ability to convey your message. Mary Kay is able to demonstrate these concepts to potential candidates by creating a way for employees to buy into a way of life. Part of the product offering is to initially try the product so that employees look good and feel good when trying to sell. Mary Kay motivates their employees to be their own boss, which exemplifies as an advantage since employees work harder when they take on the role of ownership.
Where do Mary Kay hair care products fit in an Ansoff Product Grid? Product life cycle? What marketing tasks face Mary Kay? The Mary Kay hair products fit into the diversification cell on the Ansoff Product Grid. They are employing a product diversification strategy that involves the addition of new products to their existing product lines. The hair care segment is the second largest in the branded beauty and personal care market in India. Mary Kay does not have any hair care offering in this lucrative segment.
If the requests for the introduction of a hair care line for women, is granted, it will allow Mary Kay Inc. to increase sales and grab a slice of the lucrative hair care segment of the market. Mary Kay is in the introductory stage of the product life cycle. The decision to sign off on the product line is still being debated. Discussions concerning development cost, development of market awareness and product pricing are still taking place. Mary Kay faces the following marketing Tasks; .
Development of promotion strategy to build market awareness Crafting an effective training strategy that they will be used to educate and equip the consultant to effectively sell the new product line Developing an effective competitive strategy that will allow them to compete effectively with other more mature products in the segment Decide on packaging for the new product line
Determine product pricing
Determine product development cost
5. What is the market potential for Mary Kay India hair care product line? Use a diagram. The Indian market is highly competitive with about 50 companies competing in terms of brand beauty and personal care. The hair care market in India consists with a wide range of products, such as, packaged colorants, conditioners, shampoos, and salon hair care. Market trends and consumer behaviors in the Indian market is not sophisticated. Consumers behave according to the class they belong to. As example, low income consumers who are living in rural and semi-urban areas using hair oils, herbals, and traditional products.
Middle-class consumers used to live in urban areas are tending to use branded shampoo and conditioners. Mary Kay India launched about 90 products in the Indian market and wants to establish the hair care line product. Market Trends; the hair care market in India is rapidly growing because of: The frequency of using branded shampoos and conditioners rapidly rise especially in urban areas. The trends among rural and semi-urban consumers are toward using branded hair care products. Advertising, promotions, and lower price are categories changed the trends among consumers towards using branded hair care.
Marketing Mix 4P’S Analysis;
The hair care products are packaged and sold in sachets and bottles, ranged from small size to large size. The price range for sachets (6 to 8 milliliters) is between 6 to 8 rupees, and bottles (200 to 400 milliliters) the price ranged from 27 to 369 rupees. The hair care products will be available in most retailers markets with enough stock to avoid any shortages. Mary Kay management considering the issue of building a brand name by heavily promoted its product in India involved media advertising, introducing Mary Kay culture, training programs for its independent sale force, and launch campaign with Miss India.
6. Should Mary Kay introduce a hair care line in India – why or why not? Mary Kay should introduce a new hairline in India as India is a high growing economy with high demand for cosmetics products. The Asian market is the major opportunity for Mary Kay Inc. Mary Kay main objective is to not only to create a market, selling skin care and cosmetics; it’s all about enriching women lives by helping woman reach their potential, finding their inner beauty and discover how truly great there are. Based on Ansoff Product Grid, the product introduced is in a new product in a new market. Mary Kay will introduce Diversification to target its communication channel to introduce a newer product. India is growing economy that is looking