History and Background of The Body Shop

The Body Shop was started by Dame Anita Lucia Roddick on

26 March 1976 in Brighton, England. The Body Shop is the first

company to take into consideration environmental issues by

using the natural ingredients in their beauty skin care

products. The company also concerns about animal welfare and

is against animal testing that will be indirectly harmed the

animals and environment.

The company’s mission is to provide natural beauty

products to customers and become the top brand in the beauty

sectors in Malaysia. The company will tend to maintain

customer relationship by improving their services to provide a

better shopping experience for their customers. Also The Body

Shop chooses to avoid from using advertising strategy to

promote their products. The company prefers on selling it face

to face to provide more information that the customers needed.

The main reason we had chosen The Body Shop as our target

company is because of the focus and concern with environmental

issue. Due to the concern of environment being polluted, we

strongly agree with the strategy that they established to save

environment by conducting products based on natural

ingredients and disparate to animal testing. We are also aware

that beauty products have become parts of the needs for

consumer which they tend to use it in their daily life. They

will tend to have high expectation on their skin care products

as it can enhance natural beauty and express their unique

personality. The Body Shop had successfully built strong brand

recognition to their customers which enable them to achieve

brand loyalty. Those customers are likely to purchase their

products based on what they believe on the quality and

benefits that they can gets by using it. It also attracts

their customers by providing natural beauty products to them.

History and Background of Mary Kay

Mary Kay Cosmetics was started by Mary Kay Ash on 13

September 1963 in Dallas, Texas. Mary Kay was one of the

largest cosmetics companies in United States, which also the

first company that takes consideration of all issues that will

affect women which was to enhance women’s lives. It wishes to

prevent violence against women. Mary Kay was also well-known

largest cosmetics companies in the United States that offer

direct sale strategy for more than 200 products. Mary Kay Ash

comes out with her idea of develop direct sales strategy with

the concern that most of the women are spending their time in

working and families,

With a direct sales strategy being established in the

market, the company introduced salespeople which called

‘beauty consultant’ to sell the product to the end customers.

Mary Kay had provided variety of selling strategy which

provide reliable and sufficient information, provide the

method and steps of using the products in the accurate methods

to the small group of customers. The vision of the company is

to satisfy customer expectation by delivering the products

that can enhance their self-confidence towards beauties.

In order to achieve the high quality standards of the

beauty products, Mary Kay had spent millions of dollars and

conducts more than 300,000 tests to ensure that they can

provide the best products for their customers. They also take

consideration of animal welfare which they do not conduct

animal testing on their products.

The reasons we choose this company are Mary Kay is a

local band in Malaysia and it is a company want to help women

to involve in Mary Kay business by working as a beauty

consultant to discover their dream which be able to gain their

income and involves with beauty. The company has successfully

inspired many women to involve and start to use the money they

earned from Mary Kay.

External Environment for Beauty Industry

The Societal Environment

The Body Shop and Mary Kay Company are in cosmetic

industry as both focus on the area of beauty products which

means there may be same external factors that impact the

companies. There are four main factors of the societal

environment affect the industry; political-legal, economic,

socio-cultural and technology environments (PEST).

Political-legal

The first factor of the external environment that impacts

the cosmetic industry is political-legal environment.

Voiculet, Belu, Parpandel and Rizea (2010) state that the

policy environment is a framework which is a system that

creates relationship between business and political power

whereas the legal framework consists of all legal regulations

and laws. Zakaria (2012) states that in cosmetic industry,

there are several regulations to protect customer safety such

as the Control of Drugs and Cosmetics Regulations 1984 under

Sale of Drugs Act 1952 (revised 2006). Zakaria (2012) also

wrote the Drug Authority is formed for the objective of

fulfillment the responsibilities which means companies in the

industry should concern about their ingredients and methods to

produce their products. Moreover, Malaysia is one of ASEAN

countries and it allows the ASEAN’s members to trade among

themselves but there are difficulties in terms of different

regulations, so ASEAN Harmonized Cosmetic Regulatory Scheme

was introduced to guide all the cosmetic companies to produce

same quality in the same system in producing their goods

(Zakaria, 2012). Therefore, this political-legal environment

is limitations for The Body Shop and Mary Kay Company because

the companies cannot simply produce their products with using

any inputs or methods to increase their profits and they need

to make sure that their products will not harm their customers

after consume the products both in short run and long run.

Economic

Economic factors affect the cosmetic industry by having

an influence on income and demand which include such as

purchasing power, inflation and currency rate (Costachie and

Teodorescu n.d.). Ng and Watts (2014) state that the

Malaysia’s economy growth in 2013 increased by 4.7% and it is

expected that it will keep increasing 4.5% to 5.5% in 2014.

With the improved economic performance, Malaysian customers

who have higher incomes tend to spend more on cosmetic

products, that is because the two large markets in the world

like China and Brazil are expanding their economies

dramatically which cause the world markets need to be more

active (Euromonitor International, 2013). When there is an

increasing in customer and business consumption in Malaysia,

it always raises demand of the beauty products known by an

increasing of demand in palm oil which used to produce the

cosmetic products (Agriculture and Agri-Food Canada 2011).

Therefore, due to the expectation in Malaysia’s economic

growth, the cosmetic industry tends to have better

performances in 2014.

Socio-cultural

According to Costachie and Teodorescu (n.d.), next

factors of the external environment are socio-culture factors

that impact attitude and behavior of the population in the

same area or country which contain such as social environment,

traditions and cultural values. According to The Star online

(2014), in 2010 the majority of Malaysian is Malay (67.4%),

Chinese (24.6%) and followed by Indians (7.3%). As there is a

big number of Muslims in the country, Halal beauty products

become more important in the cosmetic industry (Swidi, Cheng,

Hassan, Al-Hosam, Kassim and Wahid, 2010). As a result, due to

the big number of the Muslims, the cosmetic companies should

offer more Halal products for Muslims to increase their

profits and become more well-known. Moreover, these days there

are more people in Malaysia who more concern about design,

quality, method and reputation of companies and products to

make decisions before they purchase a product (Rezvani, Rahman

and Javadian, 2013). Therefore, The Body Shop and Mary Kay may

try to come up with new product line by producing Halal

products for Muslim consumers to increase their market shares.

Also these two companies should keep improving their goods and

using their advantages to maintain and attract customers

because the consumer may switch to other brands if they are

not satisfied with the current brand they use.

Technology

Technology is the fourth environment of the external

environment. Technology is important equipment that helps the

firms to quickly success in productivity and it helps to

create new products and consumer’s needs to the firms

(Voiculet, Belu, Parpandel and Rizea, 2010). The National

Pharmaceutical Control Bureau provides online registration

system for manufacturers to register products that they want

to produce by providing details before their productivity

(Zakaria, 2012). Zakaria (2012) states that the advantages of

the system are the new system is faster than the original

system which causes more convenient to the firms and the

organization, the safety and quality of products will be the

same and the customers can consider more beauty products for

their choices. As a result, The Body Shop and Mary Kay are

also affected by these advantages of this new online system

which is not only convenient but also an opportunity of the

two firms to gain more customers because the customers may

find products they want via this system.

Industry Environment – Porter’s Model

Porter’s five forces model is a powerful tool for the

companies to understand situations in the industry as it helps

the companies to know positions of competitors and positions

that the companies want to move into.

Competition in the industry

According to Chartered Global Management Accounting

(CGMA) (n.d.), the number of competitors represents the

attractiveness in an industry. Also the competition of the

industry is influenced by many factors such as size of

companies and industry, fixed and variable costs,

differentiation, strategies and trends (Chapman, 2005). The

cosmetic industry in Malaysia is very competitive. The

companies have to compete with each other by using promotions

such as buy one free one and advertise their brands in

newspaper, magazines, billboard and etc. to make people

acknowledge their brands (Malaysia Pharmaceutical Society,

2002). Also not only the local brand they have to compete with

but also international brands which are the majority of strong

brands in Malaysia such as L'Oreal Paris, Shisheido and Lancom

(Business for Sale, 2008).

Potential of new entrants into industry

Jurevicius (2013) states that the threat of new entrants

affects the existing firms because more firms produce the same

kind of products, customers may have to choices to consider

which means the current firms may have less revenue and these

new entrants can be new firms or firms which want to

diversify. According to Łopaciuk, Aleksandra, and Łoboda

(n.d.), purchasing cosmetics online is big pressure on

traditional shops as prices of products are cheaper as online

shops have lower costs because they do not need to invest to

build concrete shops, and customers are able to purchase more

variety of products that have specific features to reach their

satisfactions. With these advantages, it causes cosmetics

sales on the internet grow rapidly and these cause

difficulties for the new entrants to enter into the industry.

Power of suppliers

The bargaining power of suppliers is very essential in

the industry because if the suppliers are powerful, they can

enforce companies in terms of quality, quantity and price

(Luxinnoavation, 2012). The bargaining power depends on the

number of suppliers, cost of shifting from one to another

supplier, uniqueness of products or services and relationship

between strength and size of supplier (CGMA, n.d.). In the

industry has high diversification in their supply chain

because their suppliers in each company are from many

countries around the world. As they have long-term

relationship with many suppliers at the same time, it is free

to switch suppliers once they are dissatisfied with the goods

they receive (The Body Shop, 2011). Thus, the bargaining power

of suppliers is low.

Power of customers

According to Jurevicius (2013), bargaining power of

customers affects the profitability of firms as if there are

few customers in the industry, the customers will have more

power impose their requirements of service, price and quality.

Also the power of consumers depends on importance of an

individual consumer to the organization and cost to the

consumer of changing from one supplier to another. According

to Rezvani, Rahman and Dehkordi (2013), in Malaysia, there is

an increasing in number of consumers who purchase on cosmetic

products more than 40% in last few years. Due to this

increased number, there are not only woman customers who spend

money for beauty products but also men who are in urban areas

that generate strong demand of beauty products. It means that

the bargaining power of customers in the industry is getting

less as there are more consumers in the market.

Threat of substitute products

Luxinnoavation, 2012 writes that substitute products are

different products that can replace the firm’s products and

these substitute products keep improving by using technology

and innovation. Therefore, if there are many close substitute

goods, it may cause lower income to the firm. Rezvani, Rahman

and Dehkordi (2013) state that there are many choices of

beauty products for customers both international and domestic

products such as Mary Kay, The Body shop, Stila, etc. Sharma.

A, et al. (2013) found that youth will be more easily get

attracted when there are new substitute products launched in

the market. They are more likely to switch brands when the

price of product increased. Pricing strategy can easily affect

the decision making and buying behavior of consumer to

purchase the product which tends to influence them in

searching for another product. Due to the substitute goods

available in the market, it will greatly affect the company

performance as consumer’s taste and preferences will change

according to the current fashion or lifestyle.

Internal Environment for The Body Shop

Strengths

1. Strong Brand Recognition

The Body Shop has strong branding strategic which

constantly explore their products and brand positioning to the

public by making use of social media as advertising tool and

channel to communicate with consumers. Clichy (2013) wrote

that has 22 e-commerce websites and 2,849 stores across the

world. Apart from owning an official website and stores, it

also owns official accounts on different social media such as

Facebook, Twitter, Youtube and Instagram. Power,et.al (2012)

found significant relationship between brand recognition with

later purchase of goods. The Body Shop has an opportunity to

gather more market share by increase brand recognition through

media and digital promotion. They also suggested that today’s

consumer needs a discussion with other online users regarding

the brand in order to gather the information they needs for

purchasing decision. Therefore, the brands which encourage

commination between customers are usually more successful as

the source of information is neutral. The way that the Body

Shop provides online customer communication platform on

Facebook page shows a more transparent product feedback to the

potential customers.

2. Company’s positioning in market

The body shop is positioned as cooperate social

responsibility (CRS) company. Anita Roddick, the founder of

the body shop held that beauty is not only about physical

looks but also about the beauty of soul such as personality

and values. Rahim, Jalaludin and Tajuddin (2011) proposed that

Malaysians are aware of CSR due to higher education and media

explosion. According to the official website of the Body Shop

Malaysia, this company practices cooperate social

responsibilities by contributing in several events that

against animal cruelty and promoting nature protection and

ethical trading which goes along with their slogan “beauty

with a heart”. Based on the article The Body Shop design: An

evolving retail brand identity” (2007), the Body Shop is

successful in brand differentiate by promoting its products as

ethical consumption. Rahim, Jalaludin and Tajuddin (2011)

also stated that CRS has a significant relationship with

consumer buying behaviour. Besides, the Body Shop supports

profit sharing with charity organisations. The Body Shop

donates 70% of the profit earned from the Soft Hands Kind

Heart Hand Cream to charity organisation such as Tenaganita,

Nur Salam and P.S. The Children as a support for social

causes. (The Star,2011) By purchasing the product from the

body shop, the public feel as if they are financially support

social causes. Hence, the Body Shop brand positioning strategy

is effective in Malaysia market.

3. Product that suit local needs

The Body Shop offers products which is 100% vegetarian.

The products it offers are suitable for targeting niche

markets in Malaysia such as vegetarian & nature lovers. Berry

(1994) wrote that Buddhism, Taoism, Hinduism and Jainism are

the four Asian religions that encourage vegetarianism. As

Malaysia is a multicultural country, some of the Malaysians

are vegetarians due to religious factors. According to

Department of Statistics Malaysia (2010), it is noted that

Buddhism contributes to 19.8% of total population whereas

Hinduism contributed to 6.3% of total population. The Body

Shop has the skills, experiences and resources to enter the

vegetarian cosmetics market in Malaysia.

Besides, its products are certificated as halal products

which are suitable for Muslims who made up of 61.3% of the

total population. Several Islamic personal blogs had

recommended the Body Shop products to Muslims publics due to

natural ingredients and its image in against animal cruelty

which are supported by Islamic teachings.

Furthermore, the Body Shop also introduced an Asian theme

product series which features cherry blossom as the main

ingredients. As its products offer something that Asian

consumer familiar with, it is easy for the Body Shop to enter

Asian market as the consumers feel a sense of belongingness

4. Consumer Education

The Body Shop had added value into their products by

providing consumer education on the usage of its products.

Based on the article “The Body Shop gives Beauty a Pulse”

(2012), the Body Shop is trying to adopt a new “pulse concept

which consists of several consumer education activities such

as tester booths and product origin booths. Besides, it also

provides lesson on the Social Hub Section in its official

website and the YouTube official account to teach its

customers on how to apply its products. By providing such

service, the Body Shop has an advantage over its competitors

by maintain a hormone customer relationship and ensure

customer royalty.

Weaknesses

1. Poor Financial Performance

Based on 'Body Shop International, PLC SWOT Analysis'

(2006), the operating margin of the Body Shop declines by 0.9

% in year 2006 compared to year 2005. In year 2006, its

profitability performance is 8.5% which is lower than the

industry of 16.4% by a difference of 7.9%. Based on L’oreal

Financial Statements (2013), the sales decreased by 2.3%

compared to previous year whereas the operating profit

decreases by 6.5%. These financial statements show a decrease

in total operating costs. However, the decrease in total

operating profit is more than the decrease in total operating

costs. It symbolised that the marginal operating cost had

increase which results in a lower marginal operating profit.

2. Slow market growth

The decrease in sales volume for the Body Shop symbolizes

a slow market growth. Bloomberg (2013) stated that the global

market growth for beauty industry is slowly decreases to about

3.5% to 4%. Eamonn Ferry, an analyst voiced out his

disappointment on The Body Shop and L’Oreal’s performance.

(Bloomberg, 2013)

3. Reputation Crisis

The Body Shop appointed Zainah Anwar, Ivy Josiah, Marina

Mahathir and Ambiga Sreenevasan as ambassadors for their ‘Be

More Than Beautiful’ campaign to celebrate International

Women’s Day 2014. However, Fakhrul Azman Abu Bakar held that

these ambassadors are not suitable candidates as they support

LGBT which is against Islamic teaching. He asked Muslims to

boycott The Body Shop’s products as it symbolise supporting

LGBT. (Free Malaysia Today, 2014) (Amin,2014)

Furthermore, some animal welfare organisations such as

Nature Watch are trying to convict the public to boycott the

Body Shop as it was took over by L'Oreal group who practice

animal testing. As the Body Shop is owned by L'Oreal group,

its revenue might be used by L'Oreal group to invest in their

animal testing experiments and researches. (Nature Watch,

n.d.) Those customers who support the Body Shop due to its

anti-animal testing program might feel being cheated.

Mary Kay’s Internal Environment

There are plenty of cosmetic brands and beauty skin care

brands either through online, shop outlet, door to door and

market retailers. Besides, there are international and local

brand within the beauty industry which create a highly

competitive market environment, therefore, it is essential to

understand and analyze Mary Kay Malaysia’s strengths and

weaknesses to strengthen its competitive advantages more with

the aim of overcoming its company constraint and weaknesses.

1. Strengths

a. Strong Market Position with Significant Global Presence

Mary Kay brand has a strong market position with

significant global presence with wholesale sales worldwide

of $ 3 billion. It is also one of the largest direct sellers

of skincare and color cosmetics compared to other company

such as AMYWAY and Avon Products, Inc. Moreover, ‘COMPANY

SPOTLIGHT: MARY KAY INC’ (2012) stated that its sale force

exceed 2.4 million in more than 35 countries which included

its Malaysia market. Because of its strong international

presence, the company able to serve a wide range of

customers with their recruited beauty consultant spread over

various countries. The movement and market growth of Mary

Kay companies in Malaysia is highly active which can found

in its official websites or even the beauty consultants

online blog, Facebook page and other social media. In

addition, China chief executive of MK, K.K. Chua stated that

Mary Kay’s culture is strong and ethical so it is a right

decision to use its culture as their arrowhead. As a result,

consumers in the market will be impressed of Mary Kay strong

culture which creates a great mouth to mouth advertisement.

Besides, mouth to mouth advertisement is more powerful

rather than flash the brand on the billboard 10,000 times

for them to know what the company is doing to help and

approach their customer. Therefore, its significant global

presence in the market impacts Mary Kay branch in Malaysia

to come out with their new vision, “Discover what you love”

in their career conference for year 2014 to create a strong

and ethical culture in order to motivate their beauty

consultant to achieve their sales through beauty classes,

training program, national directors’ successful testimony

and self-development program.

b. Diversified Portfolio and Safe Prior of Products

Mary Kay has safety prior and diversified portfolio of

products to provide a wide range of selections to satisfy

their customer need which its product line includes more

than 200 premium men’s and women’s products in facial

skincare, tools, accessories, color cosmetics, fragrance,

body care, nail care and seasonal products. On other hand,

Mary Kay also personalized service with their products to

their customers through the company beauty consultant and

then the consumers may feel the difference and start to talk

about the culture of Mary Kay without any cost for

advertising its brand name which is hard to be imitate by

competitors or rivals. Moreover, the company awarded with

Food and Drug Administration registered drug manufacturing

operation; and also awarded the Star Work Site Designation

for its excellent safety record of its products (Mary Kay

Malaysia, 2014).

c. Unique Business Model

Unique business model is also one of the strength that

Mary Kay Cosmetic Company promoted which differentiated its

position in consumers mind and perception. On other hand, it

might look improper to other consumers with only direct sell

method which insisted by its business model, however, the

company highly encourage its business model because it can

help to benefit their costumers where they can receive

valued and quality personalized beauty service from its

beauty consultant. In addition, Mary Kay company sell all

its products at wholesale price to their beauty consultants

and they sell it in retail price which create income for

both parties. Furthermore, it also provides a difference

type of reward and beauty competition to motivate their

beauty consultants which indirectly expand their customer

base and name acknowledgement. For example, if any one of

the beauty consultant able to reach monthly sale target

settled by the company, she/he can obtained the name of

“Star Beauty Consultant” with gifts from the company such as

diamond ring, pink car, quality cooking pan, travelling

luggage and much more. Although it is not cost effective to

sell its product through direct sales channel, however, Mary

Kay manages to work it out and even offer uncountable

personalized customer service which helps it to gain a

significant competitive advantage. In 2012 years, it has

42,000 women worldwide are its independent sales directors

and 600 independent national sales directors.

2. Weaknesses

a. Weak Brand Recognition and Heavy Rewarding System

toward its Sales Force

Mary Kay INC. has two weaknesses that will affect its

market performance which are weak recognition in Malaysia

and heavy rewarding system to its beauty consultant. Mary

Kay INC. only entered into Malaysia market in 1993 years

which shows that the company has weak recognition in

Malaysia. Besides, it spent less in advertising and only

focus on its independent sales force from their beauty

consultant to spread and acknowledge of their company name

and products without any outlets; and consumer in Malaysia

prefer to buy beauty care product through shop outlets and

online today. Besides, it is hard to control its

independent work force to keep motivating and improving

which incurs cost for the company to compensate and reward

their independent beauty consultant with bonus, free trip,

gift and other rewards. Moreover, the company unable to

stop rewarding its best sales beauty consultant achiever as

the company needs to push its sales forward. As a result,

it may not be able to minimize the cost to retain higher

earning for further investment and development. In

addition, ‘SPOTLIGHT: MARY KAY 2012 stated that it has lack

of scale to compete with other large players within beauty

industry such as SKII globally because it has smaller size

in term of revenue generated, number of outlets and number

of employees. As a result, competitors able to earn more

market share in Malaysia with heavy advertisement

strategic.

CURRENT STRATEGIES

In this section, students must determine what strategies

both companies are currently following. These need to be

discussed under the different marketing headings.

Current Strategies for The Body Shop

Consumer

Customers are persons or organizations that purchase

goods or services from a business to satisfy their needs and

wants and customers are the main element that generates

revenue for companies. The group of people that The Body

Shop targets is females who have the age between 16 to 24

year-old which is a big population group as these teenagers

are pursuing beauty and start learning how to make-up. The

company tries to attract this group of people by offering

make-up classes for the teenagers learning make up

themselves which are conducted by make-up consulters and

each of the students is provided cosmetics sets (Leung

n.d.). After they attend the classes, they will be a member

of the brand directly and there are special promotions or

events that are provided for them such as 5 % discount if

they purchase products online or they can share and exchange

their make-up experiences with other members or consulters

through the online forum. Also the company realize that to

run the business in Malaysia, they need to consider Muslims

as they are the majority of the country. Therefore, they

offer halal products for this group of people to gain more

market shares.

Competitor Analysis

The competition in Malaysia’s cosmetics industry is

highly competitive as the market is saturated. The Body Shop

has to compete with some big names such as Anna Sui, Bobbi

Brown, MAC and Christian Dior. However, the Body Shop is

actually taken over by L'Oreal group, one of the largest

cosmetics and beauty companies in the world. Therefore, it

could receive technique and financial support from L'Oreal

group. Moreover, it has competitive advantages over

departmental counters such as Anna Sui, Bobbi Brown and

Christian Dior by avoiding direct competition through self-

owned stores or franchise stores which can be clearly

observed in Malaysia Shopping Mall. Apart from competing

with the major players, the Body Shop has to compete with

the small brands sold in pharmacy such as Silky Girls and

ZA. As these brands are relatively cheaper, it captures

market shares at the low-end market. Besides, the Body Shop

must aware of the presence of retail stores such as Sasa

which sold cosmetics of different brands. There are also

online retail shops that sold cosmetics from over sea

especially Korean brands. Korean brands are quite popular

lately in Malaysia due to influences of K-Pop such as Oppa

Gangnam Style as well as Korean Dramas such as My Love from

the Star.

Marketing Mix Strategies

Marketing Mix is marketing activities that include

product, price, place and promotion in the marketers’ views.

However, the marketing program in the customer’s view could

be related to 4 Cs where product represents customer’s needs

and wants; price represents cost; place represent

convenience and promotion represents communication

(University of Maryland Extension, 2013).

Price

Price is the amount of money that the customer willing to

pay in exchange for the product or the value of product in

customer’s view (Kotler & Armstrong, 2014). According to

“Company Spotlight: The Body Shop” (2007), the Body Shop

offers premium products at a middle market price. It also

stated that the Body Shop has a low sourcing cost as it

purchases high-quality raw materials from disadvantages

communities thought Community Trade program. The Body Shop

uses cost-based pricing by sourcing raw material at a low

price and passes the benefits to the customers. It is

effective for the Body Shop to steal market shares from the

big brands. However, it also uses value-added pricing to

compete with competitors in middle-price market such as

Silky Girls and Sasa. By providing products that are halal

and delivery services, it adds value to the current product

but charged at a similar price as its competitors. Besides,

the Body Shop also uses promotional pricing which allow

short-term price reduction to attract customers in order to

boost sales. It will organize sales or promotion once in

awhile to boost sales in short-term or to clear old stocks.

For example, the latest clearance sale was organized to

clear out the old lotion as a preparation for their new

lotion which was newly-introduced this month.

Place

Place refers to the channels or the location where the

products are available for sale (Wallance, 2010). The Body

Shop expands its marketing channels in order to provide more

convenience to its customers. The Body Shop has both

physical stores and online store. Its physical stores

provide competitive advantages to its business by giving

more freedom to its customers. In the physical stores,

customers are allowed to compare several products and choose

products that suit them. It is also attractive for the

first-time customers as there are samples and testers

provided in the store which they can try before buying.

Online stores however provide more convenience to the

customer especially for those current and loyal customers as

the products are delivered to their door step. It saves

their time, money and energy in a long term by avoiding

issues such as parking and traffic jam.

Product

Product is a marketing offering of an organization to

satisfy a need and a want (Kotler & Armstrong, 2014). As

cosmetics are categorized as specialty goods, it has a

strong brand preference and loyalty. It means that the

customer will not switch brand easily. Thus, the body shop

must attract the customers once they are awake of its

existence to maintain long-term relationship. At the same

time, the Body Shop must constantly review its products and

services quality because it is hard to regain the customers

once they switch brand. The Body Shop has a wide range of

halal products which consist of toiletries products, skin

care products, make-up products and accessories that are

suitable for the Malaysia market. By selling a variety of

related products, it helps in providing one-stop shopping

experience for customers to increase customer’s

satisfaction. Besides, the body shop has strong branding

strategies by relating the Body Shop with social causes

which brings positive messages to the consumers which

increase the brand recognition rapidly. The recyclable

packaging of the products also goes along with the company’s

principal of being eco-friendly. Furthermore, it also

provides product support services such as customer service

call centre. The Body Shop also plan to provide online

tracking services in the near future.

Promotion

Promotion refers to activity conducted to promote the

product offered (University of Maryland Extension, n.d.).

There are several promotion activities being carried out by

the Body Shop as a way to retain and attract customers. The

Body Shop introduces its membership program called Love Your

Body™ Club to build customer loyalty by providing exclusive

member benefits. For example, members will receive RM15

rebate voucher for every RM 150 spent and birthday discount

treat. Apart from that, the Body Shop also provides online

store promotion. Selective products are sold online with a

discount. In addition, the Body Shop also send newsletter to

its subscribers and members regarding the newly open stores

or promotion. It also promotes its products thought several

online advertising as mention earlier. The Body Shop also

uses public relation as one of the strategies to obtain

favourable publicity, build good corporate reputation and

hander negative news.

Mary Kay INC.’s Current Strategies

Since Mary Kay Cosmetics had operated its business for

about 51 years, there is thousand of women or even man found

success selling this cosmetic brand door to door and through

online as well. According to the company sales forces in

Malaysia, it is estimated that approximately 30,000 beauty

consultant in Malaysia which stated by Mary Kay Malaysia and

Singapore general manager, Nasution Abdul Rahman (2014).

Furthermore, he also stated that Malaysia was one of the

fastest growing markets for Mary Kay which recorded with

almost 20% growth for the past 3 years in Bernama Press

Conference. On other hand, the company relies on an active

sales force of independent beauty consultants, therefore,

the company believe that encouraging and promising their

consultants that they can make their dreams come true by

giving guideline to them such as form their own sales teams,

and rewarding them for sharing in each other’s success in

their Mary Kay business. As a result, it can help the

company builds greater and stronger sales force compared to

one formed from a more traditional approaches which stated

by Meredyth Glass (2014). Thus, there is highlighted

strategies which currently implemented by the company in

order to measure they are able to survive within the market.

Direct selling strategies:

Instead of selling its product through individual

consultant and retailer, Mary Kay in Malaysia open out

chances to every people or consumer in the market to have

their own business in Mary Kay and form their own sale team

to get promoted through their customer base and team sizes.

Furthermore, Mary Kay Malaysia provides wide range variety

of rewards in order to motive their beauty consultants

positively such as get promoted with higher income, free

trip, monthly challenge reward, prize-awarding ceremony,

corporate event and others. The company itself is certifies

with HALAL certificate clarified from its official Malaysia

and Singapore Website which help itself to enter into

Islamic consumer group; and then the Islamic beauty

consultants team in Malaysia is growing aggressively and

hily active which showed in Mary Kay monthly magazine. On

other hand, it provides plenty method to enrich their beauty

consultants life with high quality of beauty consultant

education either free or lowest charge to their beauty

consultants with the aim of motivating them and improving

their performance. As a result, each beauty consultant able

to increase their own sales team and indirectly enhance the

sales and brand name of Mary Kay in Malaysia.

Digital Marketing Strategy:

As online marketing opportunities grow, Viverios, B

(2009) stated that US direct sales giant Mary Kay is looking

to ramp up their online marketing strategy with the aim of

advertising their products through online with lowest cost.

Although it is hard to control the information flow in the

social network, however, Mary Kay always manage those bad

rumours well through professional expert and credible

research or report to justify and clarify its prior safety

products which find out from its company social network and

information base toward these issues. Besides, Mary Kay

Malaysia improves company policy for better and also the

rules and regulations which their beauty consultants must

obey with the aim of prevent excess and aggressive

advertisement from their consultant’s blog or social

network. If the beauty consultant ignores the regulation,

she or he will be terminated or get fired. On other hand, it

had launched customisable web tools onto Iphone, Ipad and

Android platforms which help customers to reach its beauty

consultants. An addition, it used its digital channels as

promotional tools for their beauty consultants; and also

help customers to understand more about the company itself

and its promise to its customer group and beauty consultant

as well. It has Mary Kay Malaysia facebook 32,921 fans, a

YouTube channel, 1,221 followers in Instagram, e-catalogue

that connects consumers with consultants online, a Virtual

Makeover platform and a Shareable Personal Beauty Profiler.

Hosting Event

Another Mary Kay marketing strategy in Malaysia is

hosting beauty event or parties in their beauty consultant

home, office and others places. This is an expansion of the

first marketing strategy which is in-person marketing that

encouraged by the company itself we a method to help their

beauty consultant boost sales while benefit company sales.

Through this event, it can help the beauty consultants to

invited costumers to house by using social network such as

her or his social websites, messaging application (most

preferences by beauty consultants is Wechat). Furthermore,

it can create another mouth to mouth advertisement from the

invited customers to their friends . In the hosting event,

the beauty consultants who reached the sale target able to

be compensated with several reward while those customers who

attend the event able to receive a free gift prepared by the

host. As a result, the beauty consultants can market their

products to these attendees during the event.

Network Marketing

Due to the freedom provided by Mary Kay Malaysia toward

its beauty consultant working hours, this attracts

interested users of Mary Kay cosmetics set up to sell its

products to the people around them and people who they are

close too. Network marketing involves getting interested

users of Mary Kay cosmetics set up to sell the products to

their friends on their own. The main downside is of course

the increased competitors, but referrers will get a portion

of these sales.

MARKETING OBECTIVES

Marketing objectives can be defined as the goals set by a

business which they promote their products or services to

the end customers in a given period of time. It is to ensure

that the company can achieve higher performance based on the

current marketing strategies that being developed.

Market Objectives of The Body Shop

In order to compete with competitors in middle-price

market, The Body Shop uses good quality of inputs to produce

products and sell in low prices to ensure that customer can

effort the brand’s products and the company tries to attract

more new customers who first use cosmetic products as if the

new comers are satisfied, it will be a great advantage for

the firm because the consumers will keep purchasing their

products and help the firm to generate revenues in long

terms. Therefore, the firm needs to make sure that the

consumers will not switch the brand to other brands by keep

adjusting the quality of their products and services and

coming up with new products to reach the customers’

satisfaction which subjects to change from time to time.

Also to make sure the company can survive in Malaysia and

gets the market shares as much as they can, the company

needs to come up with the halal product lines for Muslims

who only consume halal goods.

Moreover, with the advantage of being eco-friendly, the

Body Shop should make the brand more recognisable. The

company needs to select the physical store locations that

have space to place different kinds of products for

customers to compare many choices of goods and make their

decisions. Also the customers have chances to choose

products that match with their satisfactions as testers are

provided which make the brand more attractive for customers

who first time purchase the brand’s products. Besides, the

company has online channels for customers who already

royalty to The Body Shop as online purchasing causes more

convenient to the customers. Promotions are another way to

attract and retain consumers because for new customers, they

may feel that it is worth to try as the products are cheaper

or it is provided other benefits to them. For current

customers, they tend to spend much more amount of products

and they may try other products as well. Therefore, to

emphasis their reputation and make the firm more well-known,

the firm uses advertisement to reach customers’ attention.

Marketing Objectives of Mary Kay

Mary Kay established direct sales strategy and introduced

salespeople which called ‘beauty consultant’ to sell its

products to the end customers. The beauty consultant will tend

to sell the products by face to face without fixed retailing

sites which will usually sell it at home or office. Ferrell. L

(2012) stated that direct selling considered as a big business

which generate $ 30 billion in U.S. sales. Direct selling has

relied on distributors working out directly to sell their

products through social connections. This strategy has

maintained a competitive advantage which it rely on the skills

of connecting to the customers and able to create successful

results for business. Consumers will be able to experience the

benefits through direct selling which it offer convenience and

service of the products.

Besides, Mary Kay also established digital marketing

strategy as their goals to achieve higher performance in their

business. Digital marketing is a tool that company will use

electronic devices such as smartphones, tablets or laptops to

engage and connect with their customers in a convenient

method. For an example, Mary Kay had set up their company

websites that allow customers to view their company profile,

products and relevant information at any time. Social

networking is a tool that allows customers and beauty

consultant to interact and shares information among each

other. Mary Kay uses its social media platform such as

Facebook page to engage with their customers which it

considered as major success for their company. Customers will

tend to like the Facebook page of a product which they will

hope to get the latest information and updates such as special

promotions of the products. Ferrell. L (2012) proposed that

90% of customers are willing to trust online recommendations

which recommend by their friends or users that available in

social networking site.

In addition, Mary Kay also invites special guests which

help to promote the products to the end customers in the

hosting events. Beauty consultant will have the opportunity to

introduced their products during the events and have the

chances to compensated with rewards when they had achieve the

sales target. Moreover, Mary Kay develops network marketing

strategy which considered as a flexible business opportunity

to its beauty consultant. Beauty consultant will have the

opportunity sell variety of products to their customers,

friends and family and able to make substantial profits.

Mary Kay had established direct selling, digital

marketing, hosting event and network marketing as their

current market strategies. As Mary Kay’s mission was to

enriching women lives, these strategies are useful to help

accomplish with it. According to Kreydatus (2005), it shows

that 99% of the sales staff and beauty consultant of Mary Kay

was mainly build up by women which they believe that women are

more specializing in skin care and make up. The founder of

Mary Kay, which called Mary Kay Ash believe that women must

validate their respect for male in front of their families and

workplaces by dress up themselves femininely. Mary Kay had

introduced more than 200 products which offer different

features and value to the customers. It also to ensure that

their products can meet customer expectation which it can

enhance their self-confidence towards beauties. Mary Kay’s

product was developed to enrich women lives which help to

build their confidence level towards themselves. Mary Kay

established direct selling strategy with the concern that most

of the women are busy on spending their time in working and

families. So, beauty consultant would be able to provide

sufficient information to the women especially housewife by

face to face in their homes. Women will be able to enjoy

sample beauty products that offer by beauty consultant and

find out the best appropriate product that is suitable for

their skin type. At this time, they will tend to be more

confidence while choosing appropriate skin care based on the

advice and suggestions from beauty consultant. This help to

build customer’s confidence by using the beauty products which

they believe it can enhance their beauty in every aspect.

Mary Kay also provides the opportunity for women which

they allow them to view the company’s product and information

through online. Women can always compare and select the

product which they liked and able to contact with the beauty

consultant at any time. This can help to build stronger

customer relationship as the beauty consultant will always

provide appropriate suggestions and feedback to the customers.

This makes it easier for customers as they can always request

information when there is necessary from them before they

purchase specific products. Furthermore, Mary Kay also offers

the opportunity for women which they can get into the part

time jobs if they have the intention to make substantial

profits. This idea can help women to get higher chances to

know more about variety of skin care products that is offer in

Mary Kay. They are not only selling the products to the end

customers, but they also can experience and enjoy the products

which can enrich their beauty in every aspect.

The Body Shop’s Key of Success

The strategies used by the Body Shop in Malaysia have both

advantages and disadvantages. The financial problems faced by

the Body Shop had forced it to be taken over by the L’oreal

group. This action has solved its financial problems as well

as increase its competitive advantages with the big names

thought sharing of profit and technique with L’oreal group.

However, it contradicts with the company’s principles which

against animal testing. According to Peta (n.d), they strongly

suspect that L’oreal group broke PETA’s Statement of Assurance

and removed L’oreal group on its list of cruelty-free

organisation list. Peta believed that L’oreal group is still

conducting animal testing on its ingredients as no explanation

was given upon clarification. As the Body Shop is currently

owned by L’oreal group, this announcement might lead the

public to question its status as a cruelty-free company. As

mentioned in the earlier part of this audit report, Malaysian

Muslims support the Body Shop due to its halal and cruelty-

free status. By weaken this competitive advantages, the Body

Shop might lose its Muslim market shares in the competitive

Malaysia’s cosmetics market.

It is beneficial for the Body Shop to use exclusive

distribution channel by selling its products directly to the

customer without going through any market intermediaries. This

strategic allows the Body Shop to have more control in its

pricing strategies and promotion strategies. By selling its

products in its self-owned stores or franchises, it avoids

competition and contradicting interest for the company and

other distribution partners. However, this strategy limits the

number of its stores due to financial factor which reduces the

brand exposure and distribution channels. In order to overcome

this limitation, the Body Shop increases its marketing

distribution channels by adding online store to provide more

convenience to its customers. Xia and Zhang (2010) suggested

that Internet offers traditional retailers a golden

opportunity to expand their market channels while increase the

operating efficiency at the same time.

It is undeniable that promotion and sale help the Body Shop to

increase its short-term sales and profitability. However, the

discount given by the Body Shop for its online store and its

physical store are different. This type of price

discrimination could cause its customer to be being unfairly

treated. Daft (2012) pointed out that loyalty cards could help

in maintaining customer loyalty. Omar, Abdul Aziz, and Nazri

(2011) also stated that loyalty programs are designed to

sustain customer loyalty and contribute to company’s revenue.

However, they also warned that ownership of several loyalty

cards could cancel the effects (Omar, Abdul Aziz, and Nazri ,

2011). The Body Shop aware of this shortcoming of its loyalty

program and offer more activities that involve interactions

with customer such as make-up tutorial under its Social Hub

section (the Body Shop Malaysia official website, n.d.) in

order to maintain a strong relationship with them. Besides, it

also constantly updates its official accounts on several

social websites which are popular among Malaysian especially

teenagers and young adults such as Facebook and Twitter to

promote the latest events.

Evaluation for the Key Success toward Mary Kay Future Prospect

Mary Kay Cosmetics is knew as a cosmetic company that

does not follow the traditional beauty marketing approaches

because it sells its products directly to consumers through

its independent consultant sales force rather than in retail

stores as the company itself has a vision and its objective is

to enriching women lives by providing job opportunities to

them. Besides, every sales force is an independent contractor

with the company so they must obey and follow the rules and

regulation provided from Working Contract which protects both

parties at the same time. Additionally, it compensate its sales

forces in variety of ways to create motivation and incentives

to its beauty consultant’s teams , ranging from commissions,

to recognition, to incentive program such as PINK CAR Event.

However, those VIP program becomes a burden as it expanded

which occupied 8.5% of sales in 1988 years (Mary Kay

Management, 2009).

For the hosting event strategy which promoted by Mary Kay

Cosmetic Company, it will be the key for its Company to be

success and sustain their strong market present and position.

It is because this strategy does not bring any cost to the

company but it is a method to help beauty consultant to boost

the amount of their sales and attract new customers with

certain amount of cost needed to be paid with door gift, new

comers gift and reward gift to their subordinate who achieved

the sales. Besides, there is a lot of beautiful consultants

became successful in term of sales, get promoted and expansion

of their sales teams, As a result, through this strategic and

help the company to be well-known in the market without any

cost of advertisement. Thus, it is one of the criteria be

more successful in the future as it does not insert any cost

toward the company but plenty of benefit in creating

incentives for each of its independent consultant to their own

sales team.

According to the Network Marketing strategy, it may not

be an appropriate key for success because it is only work

temporary if the beauty consultant does not stand out of

comfort zone and makes sales for company, the sales that

contributed and made will only in short time period. It is

because of the competition among the beauty consultants and

other company consultants will increase as the time passed,

but there is only strong beauty consultants who able get

portion of these sales which does not reflect the objective of

the company where it want to enriching women lives. Therefore,

the request for protection from company increases which

influence the company welfare and sales as well. According to

Nancy Harnell of Home Biz Know How, 41 percent of new beauty

consultants quit within their first year and 61 percent quit

by their second year. Keeping these figures in mind, relying

solely on network marketing for income in this instance may

not be a solid strategy. Thus, Network Marketing should not be

often used and it should be replaced by another marketing

strategy in order to overcome fault competition among its own

company beauty

(2009, 12). Mary Kay Management. EssaysForStudent.com. Retrieved 12,2009, from http://www.essaysforstudent.com/Business/Mary-Kay-Management/22651.html

1. Advantages and Disadvantages of each stated Strategies for

Mary Kay

a) Direct Selling Strategic

Advantages DisadvantagesMessage or services can be

varied to fit the needs of

each prospective customer.

•Message can be varied to fit the needs of each

prospective customer.

•Can be directed to specific qualified prospects.

•Costs can be controlled by adjusting sales force size.

Direct Selling, Networking, hosting Event and Digital

Marketing strategy

Students will discuss the different strategies that the

companies have undertaken and discuss what they perceive to be

the criteria for success

Hosting Event

Advantages Disadvantages