Nu Skin International Case Study

Topics: Multi-level marketing, Marketing, Direct selling Pages: 7 (2139 words) Published: November 4, 2006
Case Study 4 Nu Skin International
Founded as Nu Skin International back in 1984, Nu Skin Enterprises is a global direct selling company that is primarily engaged in the development and distribution of personal care and nutritional products. Going international during the 1990s and currently expanding globally, NSE had 2004 revenue of $1,140,000,000 from its operations worldwide. The company has three divisions: Pharmanex (maker of natural nutraceutical products), Nu Skin (markets personal care products) and Big Planet (marketing technology services). The company is headquartered in Provo, UT. Strategic Marketing

The objective of Nu Skin International is to recruit people who want to become entrepreneurs, by selling merchandise and signing up new distributors. They collect commission income and bonus, and have the chance to build their own sales network. The focus of the market segment is to sell to the public through independent distributors. This is accomplished not only in the United States, but internationally also. The Issue

The question in the case of Nu Skin is whether it is a multilevel marketing business, or not. The purpose of multilevel marketing is to sell the product to the customer, through service distributors. According to the case, Nu Skin International selling pyramid is being questioned as to whether its main objective is to sell to customers or recruit more distributors. The distributors have to meet certain requirements when they start out, such as paying a fee and purchasing a kit. In order for the distributors to become successful, they must continue selling and recruiting, which in turn means meeting a quota. Team B will substantiate the issues raised by providing proof of Nu Skin's current market analysis. A SWOT analysis will be used to outline specific strengths, weaknesses, opportunities and threats and from that point we will use information researched to address the company's position in the market as an MLM business and relate the information located back to the issues presented. We will then conclude with our findings regarding Nu Skin's position in the market. Situation Analysis

Product lineNu Skin
Image in the MarketSkin care company
Technology and experienceThrough partnerships with the Stanford University School of Medicine and the Nu Skin Professional Advisory Board — innovators in the fields of dermatology, ethno-botany, and nutritional and cosmetic sciences we develop products that benefit from some of the most advanced ingredient technologies available today. (

CultureHigh priced, international selling product

Continue to develop innovative products that support the health and longevity of skin and hair. ( CollaboratorsCustomers
•Independent distributors
•Outside manufactures•Market size and growth
•Market segments
•Motivation behind selling and purchasing
•Consumer information sources
•Amway (Quickstar)
•Clinique•Technological environment
•Economic environment

SWOT Analysis
•Diverse product range
•Improved operating strength
•Stock Overhang no longer an issue•Reliance on Asian markets •Lack of synergies between product units
•Weak North America results
•Geographic expansion
•Continued growth within key markets
•Growth of weight management market•Presence in volatile country markets •Interest rate risks
Negative revenue trends in Japan

Diverse product range:
Nu Skin's three main business units offer a diverse range of products and services. The diversity of the range offers the company protection against the underperformance of any one-product segment, giving the company stability that less diversified groups cannot match. Improved operating strength:

In the third quarter of fiscal 2003, the company's last reported set of financials, Nu Skin reported EPS up 19%...

References: Brevoot, P. (1998). The booming us botanical market: An overview herbalgram. Fall 1998
issue 44, p. 33
Business week online. (2006) Inside wall street. Nu skin 's blemish is clearing up. Retrieved on 10/28/2006 from
DataMonitor EBSCO (Nov, 2004) Retrieved on 10/27/2006 from
Konrad, Rick. Seeking Alpha (2006). Brutal honesty at nu skin enterprises. Retrieved on 10/28/2006 from
Nu Skin Enterprises to Announce Third-Quarter Results (2006). Retrieved on 10/28/2006 from
Nu Skin Enterprises Incorporated on Squidoo (2006). Retrieved on 10/27/2006 from (2006). Company Information. Retrieved on 10/27/2006 from
Taylor, J. (2004). Truth on MLM - 5 Red Flags of a Recruiting MLM. Consumer Awareness Institute: Pyramid Scheme Alert. Retrieved on 10/30/06 from
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