In 1992, the percentage of international sales of Mary Kay Cosmetics was only of 11% of total sales while, for instance, the percentage of international sales of Avon (a main competitor) was 55%. The reasons why MKC failed when penetrating international markets were, among others, that they did a direct application of their US marketing strategy (products and communication) without taking into account the local particularities of each country where they wanted to enter. Also, their low international brand awareness made that consumers didn’t know about the firm and MKC hadn’t enough marketing resources in order to increase their brand awareness. On the other hand, Avon had success in their international expansion because they adapted the marketing strategy to the different international markets where they entered, adjusting the marketing mix strategy for each country. Moreover, they hired local managers in order to increase their knowledge about the specific locations and they adjusted prices consistent to the consumer purchasing power.
2. What criteria should MKC use in deciding how to prioritize foreign market entry opportunities?
In order to decide where to go internationally, MKC should assess the Porter’s Five Forces in the case of MKC (threat of new competition, threat of substitute products, bargaining power of customers, bargaining power of suppliers and the competitive rivalry in the industry). In addition, they should use the SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) and the PESTEL analysis (Political, Economical, Social, Technological, Environmental and Legal framework of the new market) in order to evaluate the internal and external analysis and to have a good knowledge of the new country where they want to enter.
3. What are the arguments for and against MKC entering (a) Japan and (b) China?