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ASIAN
MARKET
ENTRY
P R E S E N T E D
S O U R A B H
K U N A L
N I R M A L
P O O J A
P R I Y A N K
S O N A L I
B Y
K U L K A R N I
( 1 1 )
S A N G H R A J K A
( 1 5 )
K O T A K
( 1 3 6 )
G A R O D I A
W A N I
S H A H
( 1 4 6 )
( 1 4 8 )
( 2 3 )
INTRODUCTION
Mary Kay Inc. is an American privately owned multi-level
marketing /direct sales company selling cosmetic products.
It was 6th largest direct selling company in the world in
2011 with net sales of USD 2.9 Billion.
Business model followed dual-level marketing model
Direct Selling
Share received from sales by recruiting people into distribution
network
Communications
Beauty consultants were given training
INTERNATIONAL OPERATIONS
Australia And Argentina Not Chosen Strategically
IN 19 COUNTRIES
MKC
CANADA
AUSTRALI
A
MEXICO
TAIWAN
Culture Barriers
MARY
KAY
AVON
Realistic; Numb
er
Driven
Mentoring;
Training
Towards
Polycentric but
Dependency
Low Product Lin
e
Resource
Allocation
Only 40%
Polycentric but
Autonomy
Wide Product L
ine
MKC IN ASIA
China
Japan
Urban Population
27%
77%
Age
Group
(%)
1993
2000
1993
2000
0-24
42
40
32
29
25-49
39
39
37
35
50+
19
21
31
36
$325
$14311
Advertising Expenses
$0.86
$220
96%
Imports from
US
Local
Production
1991
Import from
other
Exports
2% 1% 4%
93%
*45% of import from other countries was from France
COSMETICS SALES
Cosmetic Sales
40%
Skin care
Others
60%
Shadow
Makeup
USA
54%
40%
Japan
25%
Some important
statistics
COSMETIC PRODUCTS
Cosmetic Products
31%
41%
Skin Care
Makeup
Hair Care
28%
Dominant
player
Reasons
Make up products
Domestic
Foreigner
Delicate skins
Products, marketing
support and
promotions
Manufactur
er
Distributor
TRAINED
BEAUTY
C O N S U LT A N T S
Retailer
GENERAL
DISTRIBUTORSHIP
Manufactur
er
Direct
selling/ Door
to door
selling
Manufactu
rer
Wholesaler
Retailer
Consumer
Sales
Person
Consumer
Other
Ways
Variety
Stores
Aesthet
ic Stores
Mail
Orders
POLA
Estd. In 1946
Ranked third in cosmetic sales and first in direct sales
Sales= 740 million USD in 1991
Target audience= Older women. Recently started targeting
younger women in the moderately priced product line
Compensation structure had 21 levels
NIPPON MENARD
Estd. in 1959
Second among direct selling products, 8 th overall
Sales= 373 million USD in 1990
Target Audience= Main brands targeted women in 20s and
30sand one high priced brand targeting older women
NOEVIR
Estd. In 1978
Sales= 292 million USD in 1990
Third among direct selling cosmetics, 9 th overall
Two brands- Sana and Nov
Sana- Targeted younger women
Nov was aimed at hypo allergic skins recommended by dermatologists
AVON
Estd. In 1973
Sales = 325 million USD in 1991
Fourth among direct selling, 13th overall
Target audience- Women in 30s and 40s
Not regularly demonstrated to consumers
MKC IN JAPAN
Comparative study was started in 1988
7 step process as opposed to 3 step process in the US
Whitening products were more popular in Japan
1992 product approval process began
About 1 million USD invested to enter the Japanese market
Dandurad believed that it would take 3-5 years to break even
MARKET : CHINA
Estimated population in 1992:- 1.1 billion
Expected to grow to 1.5 billion by 2020
80 % population lives in eastern half and 30% in urban areas
Trend towards urbanization and shift from agricultural towards service sector was expected
to continue
1979 Open Door policy bought in major developments
Since 1988 a higher income urban middle class had emerged with household earnings more
that 125$ a month and estimated savings of 35%
Retail sales had increased five fold since 1980
It was estimated that by the year 2000, 41 million households would have income of more
that $ 18,000 /annum
CONSUMERS
The urban population was becoming prosperous
and progressing rapidly as compared to the rural
87% of the Chinese woman worked and many held
two jobs
Urban workers were employed in factories or
workshops
Housing, medical, transportation costs and mid
day meals were subsidized
A two income household usually spent 25 percent
on food and rest was disposable income
Female workers were entitled 56 days of
pregnancy leaves and most factories had kinder
gardens and nurseries
PRODUCTS:
Product included prevention and removal of
wrinkles, reduction of premature ageing,
absorption into and effects on the skin,
environmental protection, making skin snow white,
smoothness and more elastic, healing acne and
purifying pores
Packaging was basic type in glass bottle with
colored caps and labels in Chinese and English.
Outer packaging was less common and varied in
the quality of carton and liner used
Instructions ranged from being printed on simple
paper to colored brochures
DISTRIBUTION
ADVERTISING:
Newspapers were small and fragmented and were rarely
used for advertising purposes
Regional channels were more popular than national channels
National channel advertising was subject to censorship
A satellite channel broadcast would reach 4.8 million people
at the rate of $ 0.50/ 1000 people
Cost of advertising varied according to the status of the
advertiser
COMPETITORS:
Foreign competitors in China included Avon, Johnson
and Johnson, Unilever, Kao, Loreal, P & G, Revlon and
Shisiedo.
The combined sale was only 3% of the market.
Avon had established a joint venture with GCF owning
40% of equity
Operated only in the southern province with sales
clocking 8 million USD in 1992
Sales of skin whitening products were strong
Used TV to promote products and pint media to recruit
sales people
Salespeople were mostly part timer ladies
MKC IN CHINA
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