McKennaWhipple

CAP31002
October62015
MaryKayCaseAnalysis
PROBLEM:CurranDandurandmustdeterminewhatadvertisingprogramwillcreatean
immediateimpactwhileappropriatelyallocatingthebudget.
CRITICALFACTORS:(1)Budget(a)howthedollarsshouldbeappropriately
allocated(b)coversproductioncostsandmediaexpenses(2)Competition(a)
consideredamaturemarket(b)mostdirectcompetitorEsteeLauder(c)Exceptionally
cheaperthancompetition(3)TargetAudienceConsideration(a)womannotinvolved
withthecompanyhavenegativeviewsofproduct/salesforce(nonusers)(b)actual
customersexhibitgreatloyaltytoproductsandconsultants(c)careerorientatedwomen
(d)typicallymarriedwomen(4)MediaOutlets(a)budgetcoversproduction(b)print
advertising(c)wordofmouth(5)Creativity(a)salesforceincentives(b)relyheavily
onconsultantsgainingloyalty(c)referrals
ALTNERNATIVES:(1)AdvertisingProgramOption1focusondistribution
(wholesale)(a)Marketingtoolspersonalsellinganddirectsupportprograms(b)
Budgetdirectsupportprogramsprovide40to50%oftheretailprice,theyaverage
over40%netprofit,theprofitabilityofanindividualconsultantsellingatretailis
successful,theaimistoput65%ofthebudgettowardperfectingdirectsupportprograms
andtheother25%towardmoreintriguingvisualaids(printads:brochures/personalized
letter)forthecompanytouseasapartofthedirectsupportprograms.Thiswillbetterthe
relationshipbetweenthecompanyandtheconsultantsiftheyknowtheyaresupported(c)
TargetmarketourTMisourconsultantsotheystickwiththecompanyandcontinueto
bringinmoreloyalties.(d)MessageMaryKaysupportsitsconsultantsandevery
individualiscaredforandrespected.Theyensuretheirinvolvementinyourbranchof
theirbusiness.PROS:Savesconsultantmoneyandtime,makingitmoreappealingto
workfor(1,2,3,4).GainLoyalties(2,3).PersonalEngagementishigh(2,3,4).No
additionaldemandsconcerningbusyschedules(1,2,3).CONS:Consultantmustpayfees
(1,3).Consultantshaveahardtimebeingrememberedbyclients(1,2,3,5).Itisdifficult
asaconsultanttoretaincustomers(1,2,3,5).
(2)AdvertisingProgramOption2productasmainfocus(a)Marketingtoolwordof
mouthandpointofsales(b)Budget60%ofthebudgetwillbedirectedtowardmore
consumerconsultantrelationsbyincreasingthepointofsalesopportunities.25%ofthe
budgetwillgotowardbettervisualaids(printadvertising)fortheconsultantstouseat
theirathomeorpersonalpresentations.Theremaining15%willremainwithconsultant
incentives/recognitionforrequiringthemtopartakeinmorepointofsalessituations.
Alsotoexpandthepointofsalestomoretargetmarketcenteredpubliclocations.The
ideabehindthisiseasierandmoreeffectivetogetthebenefitacrossusingdirect

demonstrations.(c)TargetMarketdirectedmostlytowardcurrentnonuserswith
negativeviewofbrand.Thistypeofmarketingtoolwillhelpgainmoreloyaltyandreally
keeptheproductasthefocusoftheadvertising.Itwillmakemoreconsumersinterested
inbeingconsultantsanddoabetterjobofencouraging/informingnonusersastheysee
theproductsandconsultantsinaction.(d)MessageMaryKayisrecommendedby
manyloyalcustomerswhoappreciatethebrandanditsproducts.Theyhavearealfocus
oninteractingwiththeirpotentialcustomersandwillkeepyousatisfied.PROS:Aids
awareness(2,3,5).Makestargetmarketmorereachable(1,2,3,4,5).Gooduseofthe
budget(1).Displaysthefavoronpersonalrelations(2,3,4).Demonstrationsandgood
visuals(printad)emphasizebenefit(1,2,3,4,5).CONS:Negativeviewcurrentlywith
nonuserscouldmakemoredifficultiesreachingthatmarket(1,2,3).Thosewhohavehad
badexperiencesordidnotlikethepointofsaleseffortscouldrelaybadpublicity(2,3,4).
AttendancemaybelowduetoTMbeingnonusers(1,2,3,4).
(3)AdvertisingProgramOption3Pricing(a)MarketingtoolCustomerandsales
forceprofiles.Focusonlocationspecificprofilestofindconsultantseasierandfor
customerprofilestobemoreeasilyrelatable.Thesewouldhavetobedonethrough
Internetoutletssolocationcanbechosen.Theothermediaoutletthatcouldbeutilizedis
printadvertisinginlocationspecificareaswherethereisalotoftargetmarketfrequency
(shoppingmalls,grocerystores,doctorsoffices).(b)BudgetThebudgetwouldbe
shiftedtoadvertisinginsteadofincentiveswhichiswhatisnormallyallocatedto.The
budgetwouldbeseparatedwith70%goingtowardInternetpresence/advertising,10%
goingtoprintadforprecautionsand10%remainingwithincentivestoensurethe
happinessofconsultants.(c)TargetMarketcurrentnonusersthathaveanegativetake
ofMaryKay(d)MessageFindingaconsultantnearyouwhocaneasilyintroduceyou
toMaryKayssufficientlycheaperandbelovedcosmeticslineandgetyoustartedasa
customerorconsultant.PROS:bringsinmorenonuserstogrowbrandandloyalties
(1,2,3).Willeventuallydevelopalargernumberofconsultants(1,2,3).Shiftsthebudget
effectivelybyexpandingcreativity(1,2,4,5).CONS:Potentiallyupsetconsultantsfor
takingmoneyoutofincentivesbudget(1,2,3).Nonusersarehardtoreach(1,2,3,4).
DuringthisparticulartimeframeInternetisjustcomingaboutandmaynotbefrequented
enough(1,3,4).
RECOMMENDATIONS:Althougheachprogramissimilarandcontainsomeofthe
samerelativeideas,IfeelthatProgram2allocatesthebudgetthebestintermsofthe
companyneedinganimmediateimpact.
ADDITIONALCOMMENTS:Program2caterstoboththeconsultantandthe
consumerbutstillbenefitsthecompany.Itallowsthecompanytoexhibittheirmission
statementbybeingpersonalandreelingincustomersimmediatelyfollowinglive
interactions.However,program1(2nd)andprogram3(3rd)arestillbothadequateoptions
forMaryKaysfuture.Option3mayhavetowaituntilInternetpresenceismoreofa
popularadvertisingtool.