Mary Kay in China

847 Words4 Pages
Mary Kay Cosmetics is a very popular and recognizable brand in the United States. Pick a busy street and you are bound to see a Mary Kay bumper sticker and on occasion you may actually see the infamous pink Cadillac. I have often heard female friends and family members mention they need to contact their Mary Kay representative to order a product they are out of or running low on. Having this direct contact to a Mary Kay representative is Mary Kay’s primary way of doing business in the United States. In 1996, Mary Kay entered China after seeing a decline in sales in North and South America. In 1998, the Chinese government banned direct selling as a business model. Mary Kay had difficult choices to make as it seemed their life expectancy in China would be short. Could Mary Kay change its marketing strategy in China? What can other international companies wanting to do business in China learn from Mary Kay’s experiences and obstacles? Mary Kay uses a direct selling business model in a way that employees thousands of representatives, mostly women, which are primarily commission based in pay structure. The nature of the business model is that anyone can become a representative that wishes to do direct selling and earn a commission. The representatives or agents move into different levels as they sell more products and can have new agents sell under them that make individual commissions as well as make commissions for their upper level agents. Mary Kay is able to employee thousands of agents to sell their products without having to pay a salary or hourly wage. The basic idea is for an agent to individually sell products while at the same time build a team of agents that sell products and help those agents build their own teams of agents to sell products. In essence, it is a pyramid scheme. It is important to note that it is not a scam. People do make money
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