Mary Kay Cosmetics Company - Essay Example

? External environment Why has MKC not been as successful as Avon in penetrating international markets? Mary Kay Cosmetics Company was incorporated in Texas in the year 1963. This company specialized in giving skin care system and not individual products. This company has more than 2 million sales personnel around the globe who are referred to as beauty consultants. It offers many opportunities to women. In the month of February 1993, the senior vice president of the organization in question, Mary Kay Cosmetics Inc was draw to an interesting point of concern. Mr. Curran Dandurand was thinking of the dynamics of the organizations international marketing operations. For more that fifteen years, the company had sold products outside the united states of America. However, when it came to 1992, out of the totals sales of $1billion, the company’s international sales accounted for only 11 per cent. This is opposite to Avon, a rival company which delivered more that 55 per cent of a total of $3.6 sales from the international markets in the same year. The company got a chance to venture into the international market. Among the international market ventures included launching of its operations in Japan. Japan is considered a mature market but then it happens to be lucrative in its operations. The other major market is the rapidly upcoming market in china. China happens to be quite unknown but the potential is enormous. Mary Kay Cosmetics Company was in competition for customers in both direct selling and cosmetics industries. Just to mention, the major competitor in the united states in 1992 were four companies. They included Avon, L’Oreal, Revlon and Procter & gamble. When it came to international marketing, Argentina and Australia were not chosen because of reasons bent on the company’s strategy. However, the company had a presence in many other countries and was hoping to do extremely well. In Canada, the Mary Kay cosmetics company was perceived as outdated, a clear indicator of its poor market analysis as a new entrant. This was in accordance to the research that was conducted. All this happened in the year 1992. This definitely tainted their image. Mary Kay Company needs a renewed approach that pays attention to the needs and culture of the local markets. Customers’ thoughts about a product are of utmost importance, because it determines how they shall respond to the same product. The Mary Kay cosmetics company had a lot of work to do after it suffered a low brand image. This may as well mean that the company never took enough time to understand the market requirements of the Australians. The brand image was positive in Mexico. Many people were aware of the brand in the same country. The company had rapid expansion in Taiwan, which was able to raise $3.3 million through sales. One of the mistakes Mary Kay Cosmetics Company did was to apply US market strategies directly without an acute understanding of the other markets. To be more specific, the company used the same marketing strategies used in the United States in new markets. These strategies were not even modified to pay any special attention to the new market requirements. This can be done through forecasting which could play a great role in learning the behavior of the market (Mullins, Boyd & Walker, 2010). Instead, Avon paid attention to the needs of the local markets. This included setting apart enough resources for international marketing strategies. This was important as a new entrant. Avon did not ignore other new market entrants. Mary Kay Company downplayed the implications and threats of other new entrants. Besides, in some markets the consumers were not aware of the products and services associated with Mary and Kay Cosmetics Company. Definitely, this led to low brand awareness that ended up hurting the overall sales of Mary Kay incorporated. One of the requirements of successful marketing is an acute understanding of the needs of the market. This on its own is not enough. After understanding the needs of the market, the company has to take time and address those needs through the products selection they offer. For this to be effective there has to be an aggressive marketing campaign. This is what leads to brand awareness (p.116). Other than these inadequacies, Mary Kay Cosmetics Company had limited resources that would help the company in marketing. This is contrary to Avon. What criteria should MKC use in deciding how to prioritize foreign market entry opportunities? Why? For Mary Kay Company to succeed in international market, it has to set apart enough resources for marketing. This means that the marketing effectiveness of the company in 1992 was greatly hampered and the results were seen in the overall performance in the international market. It may be the company had under estimated the budgetary allocations. Any vigorous marketing campaign requires adequate resources because marketing is an expensive affair. It is very clear that Mary Kay Company never performed adequate market research. This meant that it was met with cultural barriers in some Asian markets. Mary Kay cosmetics' marketing mix, for Asian products, emphasized on skin care and glamour. Having a product in Japan would necessitate three times more resources than doing the same in china. Mary Kay Company made an assumption that their product had a global appeal. Avon on the other hand was very successful compared to Mary Kay Company. Avon’s research group was able to learn and inform the leadership that there was danger in their brand image and access to market. In 1992, in the month of June, this finding helped shape the agenda of the meeting that was held in Florida. Avon strategized on how to venture into already established markets, and how to maintain growth in new markets. This included how to pay for the entire process. This is what Mary Kay needed to do. Mary Kay needs to do marketing forecast before interring into new markets. This include asking critical questions while at the same time avoid being too optimistic. Of great importance is market analysis in the new markets. This would shed light on the need to the people and the extent of the need. The next level would include conducting the industry analysis to know how to run a company of that nature in the new market. Many times forecast are not enough when one method of collecting data is used. As a result the company could have employed different research methods such as use of focus groups, observation, and use of questionnaire in order to come with a more precise conclusion an aspect that could have reduced the risks (Mullins, Boyd & Walker 2010, p.113). The company should also try and look on the benefits of entering the new market. This could help the company to decide if it is important to merge or acquire a new company in the new market. In some countries, some industries are owned by the state. This would make it easier to run a company in the new market. Avon paid special interest on the target group. These included: women, then on its intention to be global and how to actualize its dreams in the new markets. The Avon’s research department informed management that corporate problems centered on image and market access. How to protect the firm’s dominant Latin American and Pacific Rim positions against increasingly stiff competition, how to establish a growth track in established markets, and how to pay for it all. Out of the discussions emerged a new vision for the firm, a new marketing orientation, and a new approach to strategic development. The market needs and the dynamics of new market entry cannot be ignored if a company is to be successful in international marketing. References Mullins, J., Boyd, H., & Walker, O. (2010). Marketing Management: A Strategic Decision-Making Approach (7th ed.). McGraw-Hill Ryerson. Read More