BusinessWorld Online: Empowering beauty

Mary Kay, Inc., one of the largest direct selling skin care and cosmetic companies (it has a presence in 40 countries), has hipped up its brand colors to black and a vibrant pink and diversified its product line to add anti-aging products to a skincare line that is being marketed to women of all ages, and not just the expected target of women of mature years.

A DOLLAR was donated to Welcome House of Good Shepherd, a local shelter for abused women, earlier this year for every purchase of Mary Kay Crème Lipstick in Pink Passion and Apricot Glaze in the Philippines.

The TimeWise Miracle Set is a complete skincare regimen that claims to help women achieve an 83% reduction in fine lines and wrinkles, up to 25% improvement in skin elasticity, 46% improvement towards a more even skin tone, and 100% softer, more supple skin. The set includes a cleanser (P1,175), “age-fighting” moisturizer with SPF 15 (P1,280), SPF 25 sunscreen (P1,700), and a night solution (P1,700) -- sold individually, or as a set for P5,560.

The TimeWise line also includes a supplementary 3-in-1 cleansing bar (P1,175) for all skin types, which is supposed to be able to reduce the signs of aging and hydrate for more than 10 hours. In addition, the TimeWise Replenishing Serum+C has been formulated and tested on Asian skin, with results of the 12-week study claiming up to 33% improvement in fine wrinkles, up to 33% improvement in skin elasticity and contouring, up to 33% improvement in skin clarity, and up to 50% improvement in skin texture. In an Asian consumer survey, 90% gave testimonials of enhanced and brightened skin, 88% noted immediately refreshed skin, and 86% perceived better skin tone.

All of which are not exactly different from the claims of other beauty products out there, but the brand’s advantages include being a pledge member of PETA (People for the Ethical Treatment of Animals), and a streak of altruism that in 2008 compelled the company to donate just under $2 million from the worldwide sale of Beauty that Counts Mary Kay Crème Lipstick in Apple Berry to women and children’s charities -- this year, for every purchase of the Mary Kay Crème Lipstick in Pink Passion and Apricot Glaze through May 12-Aug. 15 in the Philippines, a dollar was donated to Welcome House of Good Shepherd, a local shelter for abused women, through its program Project: Talent Share.

Unique selling proposition

Mary Kay, which was founded in 1963, has expanded into a global company with more than two million beauty consultants and 500 independent national sales directors in 40 markets and annual sales of P2.7 billion as of 2008.

Mary Kay Philippines, which began operations in May 2000, now has more than 30,000 independent beauty consultants with the potential to be directors.

In the Philippines, a Mary Kay independent sales director would earn an average of P30,000-P50,000 each month by commission -- which does not include a large percentage in retail sales to which she is entitled -- and an additional incentive given to her in proportion to the beauty consultants she successfully mentors (a minimum of 30 recruits), all part of the Golden Rule edict of “giving back.”

Mary Kay prides itself in being a developmental company, and the selling proposition is that women advance by directly selling good products and indirectly helping other women make their sales, rather than selling the “opportunity to sell” as is the case of pyramid schemes. In effect, any sales director that ensures the success of team members will be given a monetary reward that comes directly from the company and not taken out of the members’ commissions.

Marites Ceña, who joined Mary Kay in October 2006, became a national sales director in April 2007, holds the unofficial title of “second princess of sales,” with P10 million worth of unit production annually. To date, she has helped 25 other women reach sales director status (five of whom are now national sales directors), and mentors 120 unit directors based in various locations. She has the free use of a Pink Car, received the diamond ring incentive several times, and is a full-time sales executive, quitting her former nine-to-five job for what she deems a more rewarding career that affords her time with the family.

“There are many companies that decide to come in by pricing, by product, by technology -- but any company going into a new market must ask themselves, what is our strategy? The Mary Kay strategy was we came into the market by culture, and we’re talking Philippines included,” Mary Kay Asia Services Ltd. President for Asia-Pacific K.K.

Chua told BusinessWorld, using his own firsthand experience of opening the China market in 1995, bringing the corporate values of “faith first, family second and career third,” to a newly opened economy rife with “get rich quick” schemes.

“[Founder] Mary Kay Ash herself said, ‘We are selling a way of life,’ which is empowerment. Our product just happens to help us achieve that. There was a cultural vacuum when Mary Kay first went in China ... the women at the time were attracted to the culture, it was something fresh. By so doing, we began to grow and grow and grow,” he said.

To date, China has become the third-biggest market for Mary Kay, with over 500,000 independent beauty consultants, garnering an excess of $860 million in sales.

Brand-building

Comparatively, the Philippines is a smaller market, but since opening nine years ago, there are now five beauty centers located in five major cities in the country -- Makati City, Quezon City, Davao City, Cebu City and Zamboanga City. Starting a business costs as little as P1,975 (plus tax and shipping) for a starter kit and educational materials. Advancement from independent beauty consultant to independent sales director (management level), is self-directed, with several training modules to go through, free-of-charge.

“In the past, the advantage of direct selling was personalized service, try before you buy, but not anymore. In every department store counter, it’s the same. What we have to do is train our beauty consultants so that when they approach someone, the approach is better than the department store lady. Training is very important, and persuasion, and the culture -- it’s a holistic approach. Also, we undertake brand enhancement -- advertising and promotion -- to increase brand awareness,” said Mr. Chua.

Mary Kay is currently a premium product for the A, B and upper C, with higher price points than a competing direct selling company like Avon. This proves an advantage in Korea and China, where the prevailing sentiment is that the more expensive the brand, the better it is. In contrast, Filipinos look for value for money. Nevertheless, Mr. Chua is optimistic that the customer base can only grow, and Filipinos will know the brand, appreciate the brand, and be loyal to the brand.

“The salary increases 9%-10% each year; the markets are going to catch up. We believe that Mary Kay is going to be affordable perhaps 25 years down the line. With brand-building, it becomes aspirational; in 25 years when it becomes affordable, you’ve lost that aspirational aspect, but you have very good clients whose salaries have gone up and who would look at the brand and consider it very affordable,” he said. -- Johannna D. Poblete

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