Marketing 12th Edition by Charles Lamb,Charles Lamb,Joe Hair

Exercise 19

M ARY 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 beauty 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 percent 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 skin care 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 US$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 that 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 that 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.
What are particular characteristics about this younger demographic that Mary Kay Inc. will have to tap into in order to capture and maintain the segment's attention?