marketing business

Case Study

Mary Kay Inc. Taps into a Changing Demographic

Founded in 1963 by Mary Kay Ash and her son Richard, Mary Kay Inc. is a company that has long believed in the power of women. Dedicated to making life more beautiful for women, the company was founded on the Golden Rule of "praising people to success," and on the principle of placing faith first, family second, and career third. Before her death in 2001, Mary Kay Ash received numerous awards that exemplified her personal beliefs, which were embedded as the heart and soul of the company.

Beauty and Personal Care Products and Direct Selling

While the economic situation is such that consumers are scaling back on spending for high-end nonessential items, many beautiful, and personal care products are considered necessities. At the same time, beauty and personal care products do not have country boundaries—such products are universal. According to one report, beauty and personal care products are a cornerstone of the direct selling industry and, likewise, direct selling is good for the beauty and personal care products industry. By 2009, direct sellers were capturing more than $10 billion in annual sales of beauty and personal care products.

Direct selling is a method of distributing products directly to the consumer via person-to-person selling or party plan selling and away from permanent retail locations. According to the Direct Selling Association, there are an estimated 15.1 million people involved in direct selling in the United States, with more than 66 million people engaged worldwide. Interestingly, more than 80% of direct sellers in the United States are women. The predominance of women in the direct selling marketplace has proven especially important for direct sellers like Mary Kay Inc.

Mary Kay Inc.

Mary Kay Inc. develops and manufactures beauty and personal care products for both women and men. The company spends millions of dollars and conducts more than 300,000 product tests to ensure that Mary Kay products meet the highest standards of quality, safety, and performance. With products ranging from skincare to makeup to spa and body to fragrances, the company sells its products through its direct sales force of more than two million independent beauty consultants in countries such as Argentina, Armenia, Australia, Brazil, Canada, China, the Czech Republic, El Salvador, Finland, Germany, Guatemala, Hong Kong, India, Kazakhstan, Korea, Malaysia, Mexico, Moldova, New Zealand, Norway, the Philippines, Poland, Portugal, the Russian Federation, Slovakia, Spain, Sweden, Taiwan, Ukraine, the United Kingdom, the United States, and Uruguay. The company's worldwide wholesale sales topped $2.5 billion in 2009.

With women as its primary target market, Mary Kay has stayed abreast of changing buyer behavior. For example, the company knows the younger generation expects to touch and experiment with products, so the company offers products, shades, packaging, and forms that both enable and encourage the potential user to try something new. Although there are geographic differences among preferences (e.g., Asian women focus on skin care, while Latin American and some European women are more interested in color cosmetics and fragrances), the company has found that, worldwide, women are more similar than dissimilar in their preferences.

While the company has been successful product-wise with the younger demographic, Mary Kay Inc. has been particularly astute at tapping into this changing demographic with respect to its independent sales consultants. The average age of the Mary Kay consultant is now 36 years old, and the company's fastest-growing segment of consultants is in the 24- to 35-year-old age group. Representing the future of the company, Mary Kay Inc. can provide these women with the opportunity to meet any goal they are willing to work toward—whether it is additional income or financial independence.

Yet, the company recognizes other direct-selling companies want to harness the power and dynamic of this age group. These young leaders are known for wanting increased flexibility, unlimited earning power, and the freedom to experiment in their work lives. There is a vast market opportunity for Mary Kay Inc. in the millennial generation, and the company wants to take advantage of that opportunity to usher in a new era of direct selling of Mary Kay products.

References:

Dodd, L. (2010, December).Youthful [R]evolution. Direct Selling News, 10–21.

Mary Kay Inc. Retrieved from www.marykay.com

Rice, M., Carter, I., & Larson, R. (2010, October). Beauty everlasting. Direct Selling News. Retrieved from www.directsellingnews.com/index.php/site/entries_archive_display/beauty_everlasting

Seale, B. (2010, October). Younger every day. Direct Selling News, 24–33.

Source: Instructor Manual, Chapter 9, pages 29-30

1. Your essay must include an introduction, body, and conclusion, and address all the relevant parts of each question. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number.

 Essay Question

1.  
   1. The younger demographic is important to Mary Kay Inc. both as consumers of the company's products and as its sales force.
      1. Since the market for customers and sales consultants is one and the same, can the company utilize one marketing strategy targeting both consumers and sellers? Why or why not?
      2. What characteristics of this younger demographic will Mary Kay Inc. have to tap into to capture and maintain the segment's attention, either as consumers or sales consultants?