Mary Kay is one of the leading direct selling cosmetics companies in the world. It sold a range of skin care, personal care, and cosmetics products through approximately 275,000 independent salespeople worldwide. Cosmetics market in the U.S is developed and highly competitive.
In 1993, Mary Kay was facing a mature U.S. cosmetics market, an increasing number of competing direct selling organizations and a loss of their market share. At the same time, Mary Kay"ÃÂs international sales were modest. In contrast, other direct selling companies have been successful in international markets such as Avon and Amway. Base on that fact, we can assume that Mary Kay elements of culture, philosophy, product line and marketing programs are easily transferable to the international markets.
Mary Kay was incorporated in 1963 in Texas. The company grew rapidly led by the charismatic personality and strong leadership skills of Mary Kay Ash. It has estimated retail sales of $1 billion and net company sales of $624 million in 1992.
The company's powerful culture was based on offering unlimited opportunities for women in business, coupled with a distinctive compensation and recognition plan.
This industry uses two approaches to direct selling. The repetitive person-to-person method is using by Avon and the Party pan method is used by Mary Kay. The company manufactured 225 stock keeping units and they mainly sell 46% of skin care system. Mary Kay has four basic levels of independent contractors and their promotion is entirely on performance: either volume sales or recruitment of new salespeople.
Mary Kay does not have a global international strategy. In contrast, the international expansion had been opportunistic and on a case-by-case basis. An international division received adequate attention but duplicated functions and had fewer resources available.
My recommendation is that Mary Kay should choose the Chinese market...