...Mary Kay Cosmetics: Asian Market Entry Case Study International Marketing 466 Curran Dandurand, the senior vice president of Mary Kay Cosmetics Inc.’s (MKC) global marketing group is considering how to expand the company’s international operation. She is debating which elements of MKC’s culture, philosophy, product line, and marketing programs might be transferable both in general and in particular in respect the China and Japan, two major Asian markets in which MKC does not have a presence. Dandurand must decide whether to enter either or both of these markets (or neither) and, if so, what marketing entry strategy to pursue. This case gives your global marketing team the opportunity to: 1) explore why two companies (Avon and MKC) in the same business (the direct selling of cosmetics) differ so greatly in the percentages of their sales that are international 2) examine the transferability of a corporate value system developed in the United States to foreign subsidiaries 3) identify the criteria that should determine which country markets a multinational should enter and to assess two countries against these criteria 4) contrast the implications for marketing strategy and tactics of being a late entrant in a mature market versus a relatively early entrant in an emerging market The objective of the case is to focus on the following issues and dilemmas: 1. Why has MKC not been as successful as Avon in penetrating international...
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...Alima Shamuratova Mary Kay Cosmetics: Asian Market Entry Q1. First, choosing between China and Japan Mary Kay Cosmetics (MKC) management need to focus on profit and financial performance. This is the main objective for every company. Japan market is saturated and if MKC go to this country, it will start bringing profit in 4-5 years. Thus, it will take more expenses. Chinese market is not saturated, there a few foreign competitors and it allows to think that Chinese entry brings profit earlier and be cost advantage comparing to Japan ( if calculate, it can take about 2-3 years to become profitable). Moreover, labor cost in China are cheaper. Secondly, market size of China is almost 10 times bigger than in Japan. Even though that Japan has 77% of women living in cities and China has only 27%, Chinese urban population is three times more than Japanese. Third criteria that is very important is legal and political situation. Japan is politically more stable than China. It is also more difficult to enter to China due to legal regulations and high tariffs, process of entry takes about 2 years. However, foreign companies used joint venture for entry that allows building strong relations with country and sharing risk. Despite the complicated regulation process for entry, Chinese government is more opened to foreign investments than Japan. Fourth criteria is demand and consumer behavior. China and Japan have significant culture difference in perception and sales approach. Japanese...
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...Case Summary: Mary Kay Cosmetics: Asian Market Entry The article outlines the decision making process of Vice President of Mary Kay Cosmetics Curran Dandurand whether to enter two major Asian markets: Chinese and Japanese. The author shows how circumstances on the local markets, consumers’ needs, even the type of skin and associations about cosmetics of specific nation force the product adaptation to those markets. Dandurand provides evaluation of two markets entry opportunities: Chinese and Japanese. These two countries have different economy, policies, and demographic situation, own history and culture. The article demonstrates how specific conditions of each country are essential for further planning and successful launching the product in international markets. We can see the core differences first of all in the economic ground. The population of China exceeds the population of Japan more than in 9 times. But at the same time per capita GNP in Japan in 44 times higher than Chinese. Consequently, these differences in economies are reflected in the purchase power of population and in start-up cost. The buyer power of potential consumers is one of the most important factors that is taken to the consideration while facing the decision about Asian market entry. It was estimated that start-up investment cost for China is $2.00 million, when for Japan- $10.0 million. Another important factor is that compare to China, Japan was the largest direct selling market in the world...
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...Why has MKC not been successful as Avon in penetrating international markets? There are a few reasons that explain why Mary Kay Cosmetics (MKC) has not been able to penetrate the international markets as well as Avon did. The head of MKC’s Dandurand has identified at four reasons, according to the case study. Dandurand’s analysis of MKC’s limited international success was due the following reasons: 1. Marking strategy: MKC applied its U.S. marketing strategy to different foreign markets without making sufficient local modifications. For example, the application of its U.S. style one-on-one, personal, and direct selling strategy to countries outside the U.S. did not always work well because it did not fit local culture and customs. 2. Pricing: MKC’s overseas pricing strategy was a replicate of its U.S. strategy without much consideration of the local market condition such as the income level and buying power of the customers living in those less developed countries. 3. Communication: There are many layers within the company’s organizational structure that caused communication and decision issue between its headquarter, regional offices, and local subsides. 4. Products: MKC’s product line has 225 SKUs while Avon has 1500 SKUs. Considering the type of skin of Americans as opposed to Asians, MKC provided limited selections for its overseas customers to choose from. 5. Brand awareness: MKC has a poor image overseas. Dandurand blamed the company did not provide sufficient marketing...
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...AVON -STUDY CASE- Analiza contextului global al afacerilor prin prisma factorilor de impact asupra industriei cosmeticelor The cosmetic industry is one of which products tend to be countercyclical. Demand for such products normally remains constant and unaffected by economic distress. The color cosmetics are predicted to see a slowdown in volume demand. A growing trend in the cosmetic industry is the introduction of ‘green’ products. More than one in seven (16%) of global beauty products launched in 2008 were certified organic, ethical or natural. There are concerns that the global economic climate will stifle new product development, innovation and sustainability programs in 2009. An economic slowdown usually curbs companies from investing in research and development and it is that research that has brought forth a wealth of green cosmetics. For example, retailers such as Wal-Mart are increasingly requiring more ecofriendly supply chain. There are forecasts that consumers are unlikely to give up their commitments to organic products just to save a few pennies. 68% of consumers will remain loyal to a company that has a social and environmental commitment. Many consumers are now ‘voting with dollars’ for organic products and supporting brands that support values similar to their own. Economic factors mainly affect the purchasing power of customers. The more customer demand for the product the more profit to the organization, at the same time if there is no customers demand...
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...us on a new way of thinking about and managing those businesses.” Preston was excited about the new direction taking shape at Avon. The past several years had been difficult for the organization. Hostile takeover attempts plagued the firm during the 1980s. Avon sales volume in the United States and international markets showed little or no growth. Profit margins on many products declined due to price discounting by competitors. Turnover rates of sales representatives had increased. The corporate debt was referred to as “staggering” at $1.13 billion or 82.5% of total capital in 1988 (See Appendices A, B, and C). Preston was confident, however, that 1993 would be a year of improvement for the company, both in financial performance and in the progress made “repositioning ourselves as the woman’s company for the Nineties and beyond.” Avon’s research department informed management that corporate problems centered around image and market access. That shaped the agenda of the June, 1992, meeting in Florida: 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 of the firm, a new marketing orientation, and a new approach to strategic development. This case was prepared by James W. Camerius of Northern Michigan...
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...us on a new way of thinking about and managing those businesses.” Preston was excited about the new direction taking shape at Avon. The past several years had been difficult for the organization. Hostile takeover attempts plagued the firm during the 1980s. Avon sales volume in the United States and international markets showed little or no growth. Profit margins on many products declined due to price discounting by competitors. Turnover rates of sales representatives had increased. The corporate debt was referred to as “staggering” at $1.13 billion or 82.5% of total capital in 1988 (See Appendices A, B, and C). Preston was confident, however, that 1993 would be a year of improvement for the company, both in financial performance and in the progress made “repositioning ourselves as the woman’s company for the Nineties and beyond.” Avon’s research department informed management that corporate problems centered around image and market access. That shaped the agenda of the June, 1992, meeting in Florida: 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 of the firm, a new marketing orientation, and a new approach to strategic development. This case was prepared by James W. Camerius of Northern...
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...The overall course is divided into four modules, as follows: Module I--International Business Context-- provides an historical perspective on globalization and presents a viewpoint on its future direction. It also covers some of the globalization drivers including international trade and investment and how they spawn multinational activity. The phenomenon of domestic and cross-border corruption and bribery, often an inherent part of such activities, is discussed. Finally, it postulates how countries and companies can develop competitive advantage and defines the implications for multinationals as well as host countries. Module II--Business Strategies--begins with the theoretical framework of mode and extent of entering foreign markets. It also provides a conceptual framework for formulation of business strategy within the overall context of global business. For established companies, the revamping of business strategy as external conditions change is...
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...LVMH: King of the Luxury Jungle SEPTEMBER 2009 Profit from temporary W&S woes to bag the stock at discount prices LVMH is the strongest player in the luxury goods industry, a giant in an industry where fixed costs make scale paramount; the only "two-legged" balanced player, leading with mega-brands in both Leather Goods and Wines & Spirits; enjoying stable group EBIT margins as a consequence Champagne consumer demand weakness, de-stocking and oversupply in 2010 are well understood; W&S concerns have depressed the stock close to 20-year trough multiples and in the same range of smaller and more volatile hard luxury players and other peers; an opportunity in our view On top of LVMH's unrivaled industry position, markets seem to under-appreciate cost-saving opportunities, brand-portfolio rationalization, higher FCF from lower W&S inventory investment, above-average mega-brands' results or support from first-mover EM inroads In a medium-term growth environment, LVMH has the chance to be a key consolidator in the luxury goods industry: a mega-merger with CFR would be a strategic master stroke, placing it ahead of any M&A counter move by competitors SEE DISCLOSURE APPENDIX OF THIS REPORT FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS LVMH: KING OF THE LUXURY JUNGLE 1 Portfolio Manager's Summary We have few doubts about the opportunity of investing in LVMH for the medium to long term. We expect "winners will continue to win" in the luxury industry...
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...A Project on “A study on consumer preference & usage pattern of cosmetic products in Ahmedabad region” Submitted To: Prof. Nishtha Asrani Submitted By: Deepak kerai Hitesh Asalaliya Class: PGDM- I Batch: 2013-15 NR Institute of Business Management- PGDM Opp, Law Garden, Ellisbridge, Ahmedabad – 380006, India Phone: 26447636 Fax: 26445958 Website: www.nribm.org CERTIFICATE This is to certify that Mr. Deepak kerai & Hitesh asalaliya Roll No. (P-1322 & P-1302) student of NR Institute of Business Management- PGDM have successfully completed their Summer Internship Project on “A study on consumer preference & usage pattern of cosmetic products in Ahmedabad region” in partial fulfillment for the requirements of the PGDM program. This is their original work and has not been submitted elsewhere. Date: ________________ Place: Ahmedabad Terminology used in report • HDPE Bottles (High-Density Polyethylene) This type of bottles contain very high density type of products and will be harmful to someone if it will pour without safety. So this package will definitely need a safety eye on this. • PET Bottles (Polyethylene Terephthalate) This type of PET bottles contain normally a liquid which is to be used for our cosmetics. And this type of bottles comes in different type of pack. • Mat Pat Carton This...
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...Business Quiz DHL Baseline/Tagline/AdLineof Company/Brands WE make importing Smooth Doordarshan Satyam Sivam Sundaram Electrolux India Makes life a little easier Energizer Keep going ESSAR Steel 24 carat steel Fed-Ex The World On Time Ford Mondeo Redefined Aggression Ford Motors Built for the road ahead Godrej locks PEACE OF MIND.GUARANTEED Graviera Suitings THE MAN OF SUBSTANCE Gucci Quality is remembered long after the price is forgotten Haier Inspired living Harley-Davidson If you don't have to answer to anyone, what would you do Harrod's retailer, ENTER A DIFFERENT London WORLD Hero Honda CBZ Motorcycling Unplugged Hero Honda Born in a studio, not in a Passion factory Hindustan Times Let there be light Hitachi Inspire the Next Honda The power of dreams Honda DIO FROM INDIA TO THE WORLD.AND TO YOU HSBC World's local bank Hughes Software Think skywards HYUNDAI Play a bigger game ELANTRA Hyundai's new ad Drive your way Jobsahead.com FILL IN YOUR AMBITION Johnnie Walker Keep Walking whiskey Kingfisher airlines Fly the good times Kodak You press the button and we do the rest Lacoste Because what you are LG EXPAND YOUR LIFE LG AC BREATHE HEALTHY Lufthansa There is no better way to 1 Created By: S.Sriram MBA-HR, TAMILNADU srirams@gmx.com Company Accenture Air Deccan Air India Air Sahara Airtel AKAI Allen Solly Allianz Insurance Apple Computers Bajaj Auto Bajaj Pulsar Bajaj spirit Blue Star BluestarAC Bournvita Brooke Bond BSNL BUSINESS STANDARD BUSINESSWORL Magazine of the...
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...Retailing in the 21st Century Manfred Krafft ´ Murali K. Mantrala (Editors) Retailing in the 21st Century Current and Future Trends With 79 Figures and 32 Tables 12 Professor Dr. Manfred Krafft University of Muenster Institute of Marketing Am Stadtgraben 13±15 48143 Muenster Germany mkrafft@uni-muenster.de Professor Murali K. Mantrala, PhD University of Missouri ± Columbia College of Business 438 Cornell Hall Columbia, MO 65211 USA mantralam@missouri.edu ISBN-10 3-540-28399-4 Springer Berlin Heidelberg New York ISBN-13 978-3-540-28399-7 Springer Berlin Heidelberg New York Cataloging-in-Publication Data Library of Congress Control Number: 2005932316 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer-Verlag. Violations are liable for prosecution under the German Copyright Law. Springer is a part of Springer Science+Business Media springeronline.com ° Springer Berlin ´ Heidelberg 2006 Printed in Germany The use of general descriptive names, registered names, trademarks, etc. in this publication does not...
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...labyrinth of multi-tier distribution channels, and the severe shortage of qualified marketing personnel. Firms attracted to the longterm potential of this vast country must remember to pay sufficient attention to the basics of producing, distribution and marketing a successful product (Country Commercial Guide 1998), Marketing Strategies In the early 1980s when MNCs first came to China, many thought of China as a huge market with a homogeneous culture and felt standardized global marketing would be effective in capturing the opportunities and improving efficiency. These feelings were confirmed by the desire of Chinese to acquire western technologies and their fascination with products from the West. After living in an economy of scarcity and shoddy products, the "foreign image" was synonymous with better quality, and very appealing to the Chinese. In many cases, the foreign brand advertising was sufficient to command the attention and to win the admiration of potential customers. Since in many cases, MNCs are introducing a new product or brand name in a foreign market, the evolution of their marketing strategies is...
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...labyrinth of multi-tier distribution channels, and the severe shortage of qualified marketing personnel. Firms attracted to the longterm potential of this vast country must remember to pay sufficient attention to the basics of producing, distribution and marketing a successful product (Country Commercial Guide 1998), Marketing Strategies In the early 1980s when MNCs first came to China, many thought of China as a huge market with a homogeneous culture and felt standardized global marketing would be effective in capturing the opportunities and improving efficiency. These feelings were confirmed by the desire of Chinese to acquire western technologies and their fascination with products from the West. After living in an economy of scarcity and shoddy products, the "foreign image" was synonymous with better quality, and very appealing to the Chinese. In many cases, the foreign brand advertising was sufficient to command the attention and to win the admiration of potential customers. Since in many cases, MNCs are introducing a new product or brand name in a foreign market, the evolution of their marketing strategies is...
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...Customized for: Isaac (illin@mednet.ucla.edu) THE INTRODUCTION Vault Guide to Schmoozing Customized for: Isaac (illin@mednet.ucla.edu) 2 © 2009 Vault.com, Inc. Introduction What does schmoozing sound like to you? Maybe it sounds smug, unctuous, oily, slimy. It sounds, quite frankly, like 'oozing.' Schmoozing is far from slimy, but 'oozing' actually isn’t a bad description of what a schmoozer does. A schmoozer slides into opportunities where none are apparent, developing friendships from the slightest of acquaintances. Through formless, oozy, schmoozy action, a schmoozer moves slowly but inexorably towards his or her goals. What is schmoozing? Schmoozing is noticing people, connecting with them, keeping in touch with them — and benefiting from relationships with them. Schmoozing is about connecting with people in a mutually productive and pleasurable way — a skill that has taken on new importance in our fragmented, harried, fiber-optic-laced world. Schmoozing is the development of a support system, a web of people you know who you can call, and who can call you, for your mutual benefit and enjoyment. Schmoozing is the art of semi-purposeful conversation: half chatter, half exploration. Schmoozing is neither project nor process. It's a way of life. How does schmoozing differ from networking? Conventional networking is the clammy science of collecting business cards ad infinitum, of cold-calling near strangers to grill them about possible openings in their places...
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