Who Is the Ultimate Consumer?

Written by sadnpink

We recently looked at some "information" from Mary Kay's VP of Marketing and Product Development, Yvette Franco. She boasted that Mary Kay was a “prestige” brand that directly competed with Lancome, Estee Lauder, Clinique, and MAC. Other brands such as Maybelline, Cover Girl and Avon were mere mass market brands and were really not competition.

I did a little digging just to check out some of what she stated here. In a Forbes Online article written by Mmome Ejiafar on 2/9/06, she states that Maybelline is the number 1 mass market selling brand with 22% of the North American market share. It is also the best selling brand worldwide with 7.4% of the world market.

Likewise, Clinique grabbed more than 21% of the total U.S. market share for cosmetics. It was the biggest selling domestic cosmetic of the year in 2006 as well.

I find this information very enlightening. Nowhere in the article is there any mention of Mary Kay as a major player in the marketplace. Now according to the company and its representatives, the company has 10% of the market share. This is far below what Maybelline and Clinique have in terms of sales. If you want to see the report that compares the MK products with others on the market today, you have to pay a market research firm $125.00 for the report. Makes me go hmmmmmm?

 

Ms. Franco went on to say in her presentation about Mary Kay:

In Comparison to other Prestige Brands, here is how we faired in unit sales this past year in the market place:

  • Our Time Wise Firming Eye Cream outsold Clinique’s Repair Eye Cream 4 to 1 (it was considered the no. 1 best selling brand)
  • In prestige facial exfoliators, Microdermabrasion outsold Clinique's & Day Rinse off Scrub 4 to 1.
  • Our oil free eye make up remover sold more units than the top 10 leading prestige brands combined, which makes us the no. 1 selling brand of Eye Make up remover in the country!
  • Our Ultimate Mascara outsold the top 3 prestige brands combined in unit sales. Ultimate mascara outsold Lancome’s #1 best selling mascara 3-1.
  • Our eye shadow unit sales beat the #1 best selling eye shadow brand MAC 25 to 1!!!!
  • Our Cream Lipstick sales outsold the top 3 prestige brands combined 3 to 1. Our Lip Gloss Sales outsold the top 9 prestige brand sales combined 3 to 1.

Do you need any more proof that we do sell products that women want?

Now lets take a closer look at what is being said here in the company propaganda. First, Ms. Franco talks about individual products as compared to the “best selling” brands. If they are “best selling”, isn’t that an admission that maybe Mary Kay is not on top? As I stated earlier, Forbes (a leading business journal) doesn’t mention Mary Kay as a serious competitor in their article on the leading cosmetic companies in terms of market share.

A second point of consideration is that the sales generated by Mary Kay Corporate are to the consultants. If the company still has around 700,000 consultants in the U.S., those are ultimately the consumers the company can count. They have NO MEANS of tracking real sales to real consumers outside of the sales force. In fact, the census of the U.S. in the year 2000 was 281,421,906 which means that the sales force makes up about 0.25% (that's less than three-tenths of one percent) of the population.

We know, from our own experience, that frontloading takes place. Therefore, the movement of sales units is based on what the company sells to consultants… not on real sales figures. Do you see how deceptive all of this is?

When Forbes or some other company does market analysis, they are basing their figures on real sales through retail stores not to its sales force. Yet, I have been to these meetings as a director and heard everyone cheer as Ms Franco tells the exciting news of how well we are doing in the marketplace. The company may be doing well… but what about consultants? Are they really able to move the product or are they simply warehousing it?

When I returned my product, I had well over $18,000 in retail products on my shelves. I have friends who have over $30,000 wholesale sitting on their shelves. So…. how can Mary Kay truly say they are beating other brands in sales? It is like comparing apples and oranges. The cosmetic giants do retail sales in the customary manner while Mary Kay wholesales with no means of really tracking retail sales after the product leaves corporate warehouses.

My father always used to remind me not to believe everything I heard whether it was a commercial or some “expert”. I think that is sound advice when it comes to taking a hard look at the claims Mary Kay makes about the market place. With little or no advertising, restrictions on how and where we can sell the product, and the use of the home demonstration parties, Mary Kay is like an old dinosaur in the business world.

I hope that those of you considering this business will check out the facts before you commit. It is time to take a look at the real facts as versus the hype. It could save you a lot of time and money!