Mary Kay India: The Hair Care Product Line Opportunity

Mary Kay India: The Hair Care Product Line Opportunity

Background:

Mary Kay's mission statement is "To Enrich Women's lives". In 2010, a new opportunity for market penetration was requested to provide a new hair care line for women in India. Mary Kay focuses on direct sales, a market with a much lower market share than retail for hair care products. Previously, Mary Kay manufactured and distributed hair care product lines in the U.S. and Europe which did not meet corporate expectations for profitability. Studies have shown women in India wash their hair less often compared to women in the U.S and Europe. These psychographics along with a complete analysis will need to be considered when assessing whether Mary Kay will introduce a new hair care product line in India in an effort to be profitable and complementary to the Mary Kay Mission.

Analysis:

Mary Kay's only recently introduced their skin care lines. Mary Kay was still struggling with local brand awareness, brand exposure and brand loyalty. Mary Kay's market penetration strategy in India focused on accessibly priced skin care products. Potential new hair care product lines would conflict with their market penetration strategy for brand building. However, a new hair care product line does agree with the company's mission to enrich women's lives through beauty. Therefore, expanding the existing product line offered in India to include hair care products could prove to be beneficial to the brand as the products fit within the scope of the company goals and mission statement.

The potential new hair care line would be targeted to a young (average 26 years old) and optimistic group of upcoming working women within India, primarily in the more urban areas of the country.

Total Market Potential for Mary Kay in India

Total Upper and Consuming Classes 500 Million People

Direct Selling Percentage

(using a comparison of Amway India Enterprises - a direct seller /similar company/market) x0.3%

Mary Kay India Market Potential 1.5M people

The total market potential for a hair care line is 1.5M people. For skin care products, Mary Kay decided to use a "mass-tige pricing" technique which offered their products at a 25-30% higher price than the mass market priced products. A major competitor, Hindustan Unilever, accounts for about one-third of the market sales. To establish a price for Mary Kay, we assume Hindustan Unilever products are mass market priced.

Mary Kay Mass-tige Pricing Calculation Based on Retail

Hindustan Unilever 100ml bottle

Using