Steven G. Mihaylo College of Business and Economics
California State University, Fullerton
Mary Kay India
MW 8:30 – 9:45
November 6, 2013
I. Summary of Facts
A. Market – Hair care products, shampoos, and conditioners
1. Hair care consumers in India
a. Unsophisticated, low income consumers who use traditional hair oils
b. Live in rural and semi-urban areas
2. Hair care preferences and practices in India
a. Used for washing, coloring and conditioning hair
b. Use traditional oils
3. Frequency of shampoo products in India
a. Use shampoo infrequently, once every 7 to 14 days
b. Urban middle-class consumers typically shampoo more frequently than rural consumers
c. Urban middle-class and northern India prefer bottles than other regions
d. Sachets are more popular for lower-income consumers
4. Hair care category in India
a. Consists of: colorants, conditioners, perms and relaxants, shampoos, styling agents, and salon
b. Conditioners and shampoos represented 81% of hair care sales in 2009
5. Economic market
a. Monopolistic competition
b. There are many sellers with a range of prices
1. Existing Mary Kay products in India
a. Skin care
c. Body care
2. Hair care products
c. Damage repair
a. Mary Kay India: Introduction stage
b. Mary Kay company: Maturity stage
1. Manufacturer’s unit costs for delivering packages to India ranges from $1.25 to $1.75
2. Costs associated with product development and sales training is $55,000
3. $650,000 is used for advertising, promotions and public relations in the first year
a. Relatively elastic
b. Customers are sensitive to price changes
1. Direct selling/personal selling through sales consultants
2. Forms of advertising
b. Print/television/website advertising
c. The quarterly “The Look” catalog
b. Affected by industry marketing expenditures
2. Channel: Mary Kay – distributors in India – individual consultants – consumers/Users
a. 40 hair care competitors in India
b. 10 out of 40 companies represent 77.4% of hair care product sales in 2009
c. Top 3 out of 5 competitors were multinational firms
2. Shampoo benefit statistics
a. Cosmetics account for 50% to 55% of sales
b. Anti-dandruff accounts for 20% to 25% of sales
c. Damage repair accounts for 20% to 25% of sales
3. Branded hair care product growth in India
a. Indian upper and consumer classes are growing, expected to total over 500 million individuals
b. Population is overwhelmingly young and optimistic, median age is 26 years old
c. Growing number of working women, boosting sales in cosmetics, hair, skin and body products in
d. Frequency of usage has risen in purchasing power
e. 40% of households use branded shampoos and conditioners
f. Broadened distribution, lower prices, and mass media efforts prompted switch to shampoo
4. Executives opinions on hair care product and bar soap product
a. Bar soap was a single product
b. Hair care is not easily represented and demonstrated by individual consultants
c. Touch to market in India only
5. Brand building guidelines in India
a. Keep the offering simple and skin care focused for the new Indian sales force
b. Open with accessibility priced basic skin care products in relation to the competition in order to
establish Mary Kay product quality and value
c. Avoid opening with products that would phase out shortly after launch
d. Address key product categories of skin care, body care, and color-based cosmetics
A. Primary – Whether to introduce hair care products in India
1. When to launch the product
2. Training for India’s Individual consultants
3. Packaging characteristics
4. Product line characteristics
5. Product packaging size
III. Recommended Action
A. Primary – Introduce hair care products to India
1. Launch the hair care products in less than two years
2. Online training using tutorial videos to help consultants
3. Sachet and bottle packaging style
4. Introduce three types of shampoos and three types of conditioners
5. Introduce the 6 millimeter sachet and 100 millimeter bottle for each type of conditioner and shampoo
IV. Plan of Action
A. Plan of Action
1. The plan of action for Mary Kay begins with introducing hair care products to India. Mary Kay initiated
operations in India in September 2007. Management believed that India was an opportunity for growth
based on three reasons. The first reason was because Indian upper and consuming classes were
expected to grow to 500 million individuals. Second, the population consisted of young individuals who had
a blur line between luxury and basic items. Finally, the number of workingwomen in the middle-class is
growing, which can boost sales of cosmetics, body care, skin care and fragrances. In addition, industry
analysis forecasted 50% market growth between 2010 and 2014. Mary Kay currently offers ninety skin and
body care products to India, which would make the introduction of hair care products a smooth transition.
2. In addition, Mary Kay needs to decide when to launch the products into India. Some executives believe
that it is too early to launch a new category into India while others believe a hair care product launch could
come as early as January 2012. Since product development and a marketing launch could take up to 18
months, a realistic time frame for launching this product would be two years from now. This would give
executives and the team adequate time to determine product characteristics, pricing strategy, marketing
plans, and package considerations.
3. Next, Mary Kay needs to provide training for India consultants regarding the new products. Mary Kay’s
direct selling is the key component to the brand’s marketing strategy. New independent sales
representatives receive two to three days of intensive training and a starter kit that includes products,
information about products, sales presentations, the company’s history, and team building. Culture training
is very important to Mary Kay. Without adequate training, a possible language barrier could form, which
can hurt the sales of the hair care product line introduction.
4. In addition, Mary Kay needs to determine product characteristics. Branded and packaged hair care oils,
shampoos, and conditioners are sold in sachets and bottles. Sachets are small, closed plastic packets that
are convenient for traveling and small gifts. Sixty percent of shampoo and conditioner unit sales in India
come from sachets. In rural and northern India, consumers prefer bottle-styled packaging. Therefore, Mary
Kay needs to introduce the sachet products due to the affordability for the lower-income consumers as well
as the bottle-styled packaging for the rural and northern consumers.
5. Mary Kay also needs to introduce three types of shampoo and conditioners. The first type of shampoo
and conditioner is the cosmetic platform, which contains shine, health and strength. This type of shampoo
and conditioner will strengthen and protect hair. The second type of shampoo and conditioner is the anti-
dandruff platform. The objective is to reduce the shedding of dead skin cells from the scalp. The final type
of shampoo and conditioner is the damage repair platform. This type of shampoo and conditioner will fix
dull, brittle, frizzy and out of control hair.
6. Lastly, Mary Kay needs to determine the packaging sizes for the shampoo and conditioner. Mary Kay
needs to introduce a 6 milliliter sachet and a 200 milliliter bottle for the three styles of shampoo and
conditioner. Compared to the competition, the sachet packaging sizes range in sizes from 6 to 8 milliliters.
The bottle packaging sizes range from 80 to 400 milliliters. By developing the 6 milliliter packaging, Mary
Kay will have affordable products for lower-income consumers. The bottle packaging is more popular in
urban areas than rural areas, which will attract the middle class consumer. By launching a 6 millimeter
sachet and a 200 milliliter bottle, Mary Kay will be able to reach various income groups as well as be
aligned with their competitors.
B. Set of Plausible Alternatives
1. Mary Kay should not introduce hair care products in India.
2. Mary Kay could only introduce a bottle for shampoo and conditioners.
3. Mary Kay could only introduce a sachet for shampoo and conditioners.
4. Mary Kay could create a bath soap to act as a shampoo.
5. Mary Kay could introduce a standardized hair shampoo and conditioner that can be sold around the
world in other markets.
6. Mary Kay could provide information about the products instead of hands on training.
7. Mary Kay could introduce a 2-in-1shampoo and conditioner product.
8. Mary Kay could produce a 7.5 millimeter sachet to match with other competitors
9. Mary could produce a different bottle size anywhere from 80 to 400 millimeters to match with other
C. Incorporated Assumptions
1. Some executives are weary to introduce a new product line, especially only in India. The executives
fear a new hair care product line would not easily be represented or demonstrated.
2. The bottles are more popular in urban areas. The growing market could keep costs down from having
to produce a sachet package style.
3. Bath soap is often used as a substitute for shampoo products.
4. Some executives believe it is too soon to launch the new product line. Beauty consultants are still
learning about the company and the existing products.
D. Supportive Argument
1. Mary Kay needs to extend production in India with the addition of hair care products. The hair care
industry in India consists of colorants, conditioners, perms and relaxants, shampoos, styling agents, and
salon hair care. In 2009, the beauty and personal care market in India produced $55.6 billion and the total
hair care market produced $14 billion. In 2009, the top selling items were conditioners and shampoos.
Currently, Mary Kay has five competitors in the India hair care product market. In order to stay competitive
with current brands, Mary Kay needs to develop a hair care line to obtain market share in the industry. The
top two companies are Hindustan Unilever Ltd. with 18.7% and Dabur India Ltd with 13.0% of the market
share. The market share is very competitive, which would allow Mary Kay to have a stable market share
with the launch of hair care products. With high hair care product sales and lower market share
competition, Mary Kay will effectively and efficiently develop hair care products in India.
2. Mary Kay needs to launch the hair care products in December 2011. With a launch date in 2011, Mary
Kay will have a little more than a year to determine the product development process in a feasible time
frame. By launching the hair care products in December, Mary Kay will develop greater product
determination before the spring season begins. With a launch date in January, many consumers will have
less discretionary income after the holiday season. Mary Kay will be able to utilize the holiday season for
greater sales incentive.
3. Furthermore, Mary Kay needs to develop training consultants in India. Mary Kay's key marketing brand
strategy is direct selling with consultants. In 2010, Mary Kay had 4,000 independent beauty consultants
present in over 200 cities out of about 1,500 Indian cities and towns. The consultants receive two to three
days of intensive training and a starter kit. By utilizing online training, Mary Kay can effectively and
efficiently develop additional consultants. The online training would be in various languages depending on
the country where Mary Kay uses consultants. The company’s approach to direct selling utilizes the “party
plan,” in which independent sales representatives host parties in a customer’s home to demonstrate and
sell products. Attendees have the opportunity to experience the products before they make a purchase
decision. In addition, Mary Kay can use "How To" videos and various other platform tools to further train
4. Mary Kay hair care products must utilize the sachets and bottle packages. Currently, the top-five
competitors use both styles of packaging. The sachet package size is very popular as sixty percent of the
shampoo and conditioner unit sales come from sachets. The bottle packaging is the standard in most
countries, which is a benefit for Mary Kay. The bottle packaging will appeal to standard and everyday
consumers. The sachet packaging style would appeal lower-income consumers, first time consumers, and
can be used to stimulate new brands. In addition, the sachet and bottle packages can be used for gifting
and convenient purchases. In order to compete with top competitors, Mary Kay needs to utilize the bottle
and sachet packaging styles.
5. In addition, Mary Kay needs to introduce three styles of shampoos and conditioners, which will be
catered for the certain hair types and features. The three features will include specialization for cosmetic,
anti-dandruff, and damage repair. The features are benefits of hair care products and are necessary to
satisfy consumers. By proposing three styles, Mary Kay can develop the hair care brand. Once the hair
care product is successfully established in the country, Mary Kay will be able to produce different features
and product styles in the near future.
6. Mary Kay needs to introduce a 6 milliliter sachet and a 200 milliliter bottle for the shampoo and
conditioner. Out of the top five competitors, these two sizes are the most popular and most commonly
used. Currently, three out of the top five competitors use the 6 milliliter sachet package size, while four out
of the top five competitors produce the 200 milliliter bottle package size. By producing these two packaged
sizes, Mary Kay will be aligned with the competition and reach various income level consumers. Mary Kay
will be able to design, develop, and launch the hair care product line strategically and cautiously.