Global Market Case Study
Mingfeng LiMKTG 11106/22/16Global Market Case Study—Mary KayQuestion 1: Is Mary Kay an “international firm”, a “multinational firm”, or a “transnational firm” as defined in this course and based on its marketing strategy? Why?Based on the marketing strategy that Mary Kay utilizes, it is a multinational firm. The key field to differ an international firm from a multinational or transnational one is their marketing strategy. If a company is an international firm, it tends to apply strictly same marketing strategy and sell exactly identical products in other countries as in its home country. While if a firm is a multinational one, it considers every country as a unique and independent market and conducts marketing strategy accordingly, which is named “multi-domestic marketing strategy”. A transnational firm, on the other hand, focuses on the similarities across customers in different countries. It employs a global marketing strategy– “the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.”According to the definitions, Mary Kay is a multinational firm. For instance, Mary Kay uses multi-domestic marketing strategy when it entered Chinese market. Due to the difference of beauty perception between western and eastern culture, rather than makeup products, which is popular in America, Asian markets generally accept skin-care products more freely. It is stated in the article “Mary Kay Cosmetics: Asian Market Entry” that Mary Kay develops many brand new products to connect with customers in Asian markets, mostly anti-aging cream, whitening creams and other skin care products (Quelch, 2009).
Overall, May Kay devotes effort to the preferences of women in different cultures and apply marketing strategy accordingly, therefore it is a multinational firm.Question 2: What global market-entry strategy did Mary Kay use when it entered India?The Major global market-entry strategy that Mary Kay used to enter India is direct investment.The Cosmetics Country Manager of Mary Kay, Hina Nagarajan once pointed out in an interview that they expected the market in India would be as large as in China in terms of revenue and profit (Business Standard, 2011). The marketing-entry strategy that Mary Kay used to achieve this goal is direct investment. Mary Kay invested $20 million in the Indian market in September, 2007 and managed to operate a foreign division, Mary Kay India, headquartering in Gugaron, India (Pitman, 2007). By using the direct investment strategy, it succeeded in bringing $2.5 billion turnover in 2009 (GCI, 2012). According to an article published on GCI magazine, K.K. Chua, president of Mary Kay in Asian-Pacific area stated in 2012 that May Kay expanded its investment in India with additional $ 10 million in 2011, which will be used towards “brand building by opening more brand experience centers and offices” and warehouse building to improve the logistics and supply chain (GCI, 2012).