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The story

When Mary Kay Ash set up her eponymous cosmetics company in Texas in 1963, her intention was that its “independent beauty consultants”, as the salesforce are known, could combine earning their own living with family life. They would sell products such as face creams and make-up to other women by holding parties in their homes.

In 1995, when setting up in China, Mary Kay wanted to stay true to the values of the founder while operating in a very different market and culture.

The challenge

Within a short time, Mary Kay China established its name among Chinese consumers and experienced steady growth in the country’s first-tier cities. (Now, it has set up 35 branch offices across the country.) When the company first began expanding beyond China’s big cities, which seemed an obvious means for exploring future potential markets, both the brand and its direct-selling model were new to consumers in China’s second- and third-tier cities.

Also, Mary Kay’s emphasis on promoting women’s financial independence alongside work-family balance was potentially in conflict with more traditional Chinese culture, which prizes women’s shouldering of domestic responsibilities.

The strategy

Mary Kay China believed it could turn its direct-selling model and its emphasis on social values to its advantage.

For instance, staying faithful to Mary Kay’s ethos, especially concerning family life, could win it the loyalty of employees who would then be more likely to champion the brand.

● First, it drew up strict rules on how beauty consultants should conduct themselves and present Mary Kay products. This would send a strong message to them and to consumers about the brand’s values.

● Second, it developed advertising campaigns in a variety of regional print and broadcast media, again aiming to publicise the brand’s philosophy.

● Third, the management team established special training programmes that would imbue consultants with Mary Kay’s values, as well as familiarising them with the products and the skills needed to run the beauty classes.

The training programmes had a number of strands: they linked Mary Kay China’s corporate goals with employees’ own personal ambitions; they specifically incorporated values that were shared by Mary Kay and Chinese culture, including emphasising that Mary Kay provided women with jobs that allowed them to maintain harmony at home; and they also provided training to help beauty consultants improve their family life.

Meanwhile, the salesforce would represent a competitive advantage. Because they would hold beauty classes in their homes, the consultants would know their customers well. Such personal networks would be vital because Chinese consumers tend to trust people with whom they have a good relationship. Their close relationships with relatives and friends would ease making follow-up visits to get feedback and introduce new products.

The result

Mary Kay China became one of the leading cosmetics brands in China’s second- and third-tier cities by 2011 according to Kantar Consumer Panel Report, the research company. Sales revenue in China in 2011 was 55 times higher than in 1999. Mary Kay China has been recognised by Fortune China as one of the best companies to work for.

The lessons

When expanding outside their home country, companies may look for localised ways to transfer their values and culture to employees.

Mary Kay achieved this in China by realising that it shared certain social values with its Chinese salesforce and consumers. In addition, it recognised that the importance of social relationships and connections fitted well with its direct-selling model.

Mary Kay communicated the ways in which it shared Chinese values and culture through staff training, backed up by advertising. This helped Mary Kay China build brand loyalty with both its salesforce and consumers.

The writers are, respectively, associate professor and director of the case development centre, and a research assistant at Ceibs

Copyright The Financial Times Limited 2017. All rights reserved.
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