INDEX

EXECUTIVE SUMMARY

MARKETING PROBLEM

PRODUCT AND BRAND ANALYSIS

COMPETITOR ANALYSIS

SWOT ANALYSIS

MARKETING OBJECTIVES

ADVERTISING OBJECTIVES

TARGET AND TARGET PROFILE

MEDIA OBJECTIVE

TARGET COVERAGE

REGIONALITY, SEASONALITY AND SCHEDULING

MEDIA VEHICLE SELECTION

VEHICLE SELECTION RATIONALES

MEDIA BUDGET ALLOCATION

CREATIVE CONCEPTS

CREATIVE STRATEGY

CREATIVE EXECUTION

PROMOTION AND IMC EFFORTS

COPY TESTING AND EVALUATION

REFERENCES

EXECUTIVE SUMMARY

Mary Kay has been one of the top direct selling beauty companies in the world since its founding in 1963. The companys founder, Mary Kay Ash, established the com-pany with the desire to, first and foremost, help wom-en around the world feel confident, natural and beau-tiful, as well as to help make the world a better place. Using the Golden Rule as her companys core principle, Ash helped her company grow into a corporate man-ifestation of her values and beliefs. Over the last 50 years, Mary Kay has grown to become a top 10 skin care brand globally, as well as a top 15 color makeup brand.

Unlike most other beauty and cosmetic companies, Mary Kay is a direct selling company that is not allowed to sell its products within brick-and-mortar establishments. As a result, Mary Kay has consistently trailed behind other well-known cosmetic companies that consumers purchase from in retail locations. The company employs more than 3 million direct sellers, known as Independent Beauty Consultants, in 35 countries around the world.

Mary Kay prides itself on being a company that cares. In fact, the company has a number of charities and philan-thropies that it contributes to year after year. Its Beauty That Counts program donates millions of dollars toward changing the lives of less fortunate women around the globe. They are also a company that is committed to help-ing the environment; its Pink Doing Green initiative allows them to assist in reforestation efforts around the world.

Its facilities are also zero-landfill sites, and its packaging materials are made of renewable and recyclable materi-als. The company also helps women who are victims of do-mestic violence through its Pink Changing Lives program.

Despite its strengths, Mary Kay is struggling to bring in consumers from younger demographics. The compa-ny is perceived, by most younger women, as a cosmetic brand that is meant for middle-aged and older women. The company consistently loses younger customers to its competitors, such as Revlon, LOreal and Maybelline. The company has asked for a new ad campaign for the period February 2015 to February 2016. Mary Kay wants the campaign to connect with Gen Y females (females 18-25), raising their brand awareness and positive per-ception of the Mary Kay brand. As a secondary objective, Mary Kay wants to increase its number of Gen Y IBCs.

Using the designated budget of $10 million, Flux has cre-ated a campaign for Mary Kay that will help the company connect with Gen Y consumers on a more personal lev-el. Flux intends to raise Mary Kays profit margins by 20 percent by the end of the fiscal year 2015, as well as to increase the companys market share by three percent. We also expect to see a ten percent growth in Gen Y IBC enrollment within two years of the campaigns end.

Using creative concepts drafted by Flux, Mary Kay can expect to reach 75% of our primary target au-dience in the Northeast and 65% of our second-ary target audience in the South, West and Midwest

by year end 2014, with an average frequency of 4.

MARKETING PROBLEM

Founded in 1963, Mary Kay is one of the largest direct sellers of skincare and cosmetic products, netting roughly $3 billion in worldwide sales annually. After opening its first international venture in Australia in 1971, Mary Kay has seen tremendous growth over the decades, and it now operates in 35 markets around the world. They are not, however, immune to the many problems that a business may or may not encounter.

People generally look down upon the direct selling method that Mary Kay employs to sell its products. In fact, many customers feel like theyre being coerced or begged into buying products from IBCs; some even think Mary Kay is nothing more than a pyramid scheme. Mary Kay must utilize its IBCs in a way that better connects with consumers and allows them to feel more comfortable when purchasing from Mary Kay.

In addition, the target market that Mary Kay is pursuing for this campaign is not ideal. Women 18-25 do not as-sociate with the Mary Kay brand. The vast majority nev-er even consider Mary Kay when making skincare and cosmetic purchasing decisions. The widely held belief is that Mary Kay is, plain and simple, a brand for mid-dle-aged women. Flux must determine the best method with which Mary Kay can reach out and connect with these young women in a way that shows them the quality of Mary Kay.

PRODUCT & BRAND ANALYSIS

The market size for the beauty industry, as measured by total sales, is relatively large in the U.S. (about $92.2 billion). Conversely, the market size for the direct selling industry is low, roughly $8.8 billion. It is a market that is on the rise, however. Direct selling revenue, globally, is estimated to be around $153.7 billion. Revenue within the beauty industry as a whole is expected to grow to $102.3 billion by 2017. Below are the BDI and CDI for Mary Kay products.

As indicated by the chart above, Mary Kay is not a strong brand in the Northeast. Flux will focus Mary Kays advertising efforts offensively in the Northeast and defensively in the South and West and Midwest.

Unlike BDI, the CDI for beauty products in all four re-gions of the country is relatively strong. Flux will pri-marily use the numbers from its BDI findings for the purposes of this campaign, simply because it is more advantageous for Mary Kay to focus on areas in which it is already known.

BDI FOR MARY KAY PRODUCTS

CDI FOR COSMETICS CATEGORY

Eye shadow/

Liner/Pencil

Facial cleansing/

Toner

Found-ation/

Concealer makeup

Lipstick/Lip gloss Mascara

Moisturi-zers/

Creams/Lotions

Suntan/Screen

Northeast

Midwest

South

West

90

98

112

91

68

116

99

113

76

79

121

105

55

123

119

100

90

89

107

107

63

117

104

107

87

50

92

168

Eye shadow/

Liner/Pencil

Facial cleansing/

Toner

Found-ation/

Concealer makeup

Lipstick/Lip gloss Mascara

Moisturi-zers/

Creams/Lotions

Suntan/Screen

Northeast

Midwest

South

West

102

95

99

105

99

101

95

108

93

97

101

107

98

94

103

103

92

98

96

114

98

98

97

109

113

96

93

104

COMPETITOR ANALYSIS

Flux identified Mary Kays primary competitors as Cov-erGirl, LOral, Maybelline & Revlon. These competitors were chosen based on the size of their market shares within the beauty industry and on the desire to pit Mary Kay against the largest names in cosmetics. As of 2009, the market shares for Mary Kays competitors are as follows:

EYE SHADOW

CONCEALER

LIPSTICK

Maybelline (1)

LOreal (3)Revlon (4)

Covergirl (2)

12.32%

8.01%

5.72%

5.48%

Revlon (1)

7.13%

Maybelline Mineral Powder (2)

Maybelline Cover Stick (7)6.24%

LOreal (3)

5.91%

Cover Girl (5)5.12%

LOreal Colour Riche (1)

10.7%

Maybelline Moisture Extreme (7)

Revlon Super Lustrous(2)10.6%

Covergirl Outlast (3)

8.4%

4.5% Revlon Colour Stay Overtime (5)4.7%

EYE LINER

Flux also identified a number of secondary competi-tors, including Amway, Avon and Herbalife. Their rev-enues and market shares, as of 2011, are as follows:

Amway - $10.9b [1] Market Share: 7.09% [2]Avon - $11.3b Market Share: 7.35%Herbalife - $3.5b Market Share: 2.28%

Revlon (1)

10.18%

Maybelline Unstoppable (5)

LOreal (6)3.60%

Covergirl (3)

5.06%

4.33%4.88%

Mary Kay

STRENGHTS

Mary Kay is a top 10 skin care and a top 15 color make-up brand globally.Displays corporate social responsibility with: Mary Kay Pink Doing Green (reforestation ef forts); a zero-landfill global manufacturing facility 100 percent biodegradable packaging. The Mary Kay Foundation which donated more than $31 million to domestic shelters and programs against domestic violence. Partnering with the Love is Respect organization to create the nations first and only dating abuse text message helpline.Mary Kay is an official sponsor of Project Runway, which is a show that connects with our target.Mary Kay brand is ranked 2nd in the beauty and per-sonal care market, 6th in skin care and 9th in color in comparison to its competitors.Offers business opportunities to consumers with a 50% commission.Mary Kay has a social networking presence within the top 10 of all beauty companies.IBCs allow consumers to try Mary Kay products before actually buying them.

SWOT ANALYSIS

WEAKNESSES

The direct selling model highlights the personal care and experience of IBCs, but at the cost of convenience. Rather than simply picking up eye shadow while mak-ing other purchases, the process of getting makeup from Mary Kay involves contacting your IBC, waiting for shipping, etc.. The average IBC, at the age of 42, is very unlikely to connect with our target audience. Mary Kay products are more expensive than their com-petitors.

OPPORTUNITIES

Sales in beauty industry is expected to grow. A new target market brings with it new opportunities for the brand to expand its product offerings and over-all brand tone. Marketing to a younger demographic offers Mary Kay the chance to position itself in a completely new light, one in which the company can appear more vibrant and current, rather than neutral and outdated.

THREATS

Direct selling is only about 11% of total beauty sales revenue; retail brands comprise 80%. Unlike its primary competitors, Mary Kay is not allowed to sell its products within brick- and-mortar establishments. This gives the competition a significant advantage over the company.

Mary Kays own positioning is weakening the brand. Younger females see the company as one that makes products for middle-aged and older women, not women their own age.

Competitors

Cover Girl

STRENGHTS

Celebrity endorsements.Affiliated with philanthropies, such as the Safe Drink-ing Water program.Large presence on Facebook and Twitter, the two larg-est social media sites.Offers in-store discounts.Cheaper products than other beauty brands

WEAKNESSES

Doesnt have a green product line.Large product mix that changes often, affects product and brand loyalty.

THREATS

Clutter in retail beauty market.Online commerce is the fastest growing segment of the beauty industry.

LOreal

STRENGHTS

Positioned as high-end consumer cosmetics.Strong social media presence on Twitter, Facebook, Instagram.Sponsor of Mercedes Benz fashion week

THREATS

Clutter in retail beauty market.*Online commerce is the fastest growing segment of the beauty industry.

Revlon

STRENGHTS

Celebrity endorsements.Positioned as sexy and trendy, which appeals to our target.

WEAKNESSES

Weaker presence on social networks such as Face-book and Twitter, in terms of likes and followers.Fast-changing product mix.

THREATS

Clutter in retail beauty market.Online commerce is the fastest growing segment of the beauty industry.

MARKETING OBJECTIVES

Our marketing objectives are to: 1.Increase sales over the next fiscal year by 20 percent. 2.Increase market share in the direct selling cate- gory by three percent. 3.See a 10 percent growth rate of IBCs from tar get market within two years of the campaign, with expectations to grow over time.

ADVERTISING OBJECTIVES

Our advertising objectives are to: 1.Increase awareness among target, informing them of the brands products and features (females ages 18-25). 2.Increase positive perception among target. 3.Increase consideration for product purchase and for the Mary Kay business opportunity among target audience.

TARGET AND TARGET PROFILE

Numbers in parentheses indicate indices from Choices3 psychographic research.

For the purposes of this campaign, Flux has chosen females aged 18-24 as Mary Kays primary target audi-ence. This demographic is full of impulse buyers who like to change brands simply for the sake of novelty (111 & 118, respectively). They are not particularly brand loyal (86), and they depend more on their own research when buying products rather than relying on the opinions of their families and friends (73). Fortunately for Mary Kay, these women prefer to purchase products from compa-nies that sell through representatives who work from home (265).Flux surveyed a number of women within Mary Kays primary target audience. Some of the most relevant findings are below: (Andrea-if theres a way to visual-ly show this in the book rather than through this big block of text, Jeong would prefer that.)

1.55 percent of those surveyed spend the least of their money per month on beauty products. 2.68 percent dont follow beauty brands on social media, and of those who do follow one or more, Sephora is the most followed brand. 3.As much as 85 percent of those surveyed in dicated that they would consider following a beauty brand on social media. 4.In terms of content, 72 percent want to see on

line tutorials from beauty brands, and 54 percent want to see beauty trends. 5.Mary Kays target looks to magazines and web sites the most for beauty inspiration. 6.92 percent trust friends for beauty advice more than anyone else. 7.84 percent worry more about moderate prices on beauty products than anything else. 8.82 percent purchase the same beauty brands time and time again. 9.62 percent would not sell the products of a brand they like.

Flux has also designated Mary Kays secondary target audience as women aged 30-34. This demographic was chosen based on a comparison of Choices3 indices of multiple demographics, as illustrated below.

Mary Kay product usage: Women 25-29: 250 30-34: 275 35-39: 184 40-44: 266

Mary Kays competitors target audiences are as fol-lows: Revlon - 18-24; 25-34 Maybelline - 18-24; 25-34 Covergirl - 18-24; 25-34 Loral - because LOral owns many brands, there are many different target audiences

MEDIA OBJECTIVE

Our objective is to reach 75% of our primary target audi-ence in the Northeast and 65% of our secondary target audience in the South, West and Midwest by year end 2014, with an average frequency of 4.

TARGET COVERAGE

Flux intends to advertise Mary Kay defensively in the South, West and Midwest and offensively in the North-east. Within Mary Kays primary target audience, Flux expects an average reach of 43 million nationwide, with an average frequency of 3. Within Mary Kays secondary audience, Flux anticipates an average reach of 27 mil-lion, with an average frequency of 5. Flux believes that its objectives will assist Mary Kay in reaching its stated advertising and marketing objectives primarily because, with a higher emphasis on reach to the companys pri-mary audience, the campaign has a higher likelihood of being seen by millions of Millennial women.

REGIONALITY, SEASONALITY &

SCHEDULING

Regionality

After thorough research, Flux discovered that Mary Kay needed a defensive campaign in three of the four re-gions in the U.S., as the brand is already well-known in those areas of the country. Because the Northeast has potential to grow, Flux intends to advertise more heav-ily in the region, compared to the rest of the country. We will allocate our advertising budget accordingly:

The people in the Northeast are all likely to purchase Mary Kay products if they are informed of the quality the brand has to offer. Conversely, in the rest of the country, people are already more likely to purchase Mary Kay, so we do not see a need to advertise as heavily in those regions.

South

17%

West

17%

Northeast50%

Midwest

16%

Seasonality

Flux believes that makeup is not a product that is worn more often during some parts of the year and less often during other parts; its a product that is in de-mand year-round. However, it is important to recognize the increase in consumer demand and shopping during the holiday season. Therefore, we have decided to set the campaign on a continuous schedule with slightly heavier emphasis on the holiday season because of gift giving.

Scheduling

Due to the seasonality of the campaign, Flux has desig-nated the campaign to run on a continuity schedule for optimal target coverage and because of the perennial aspect to cosmetic products.

MEDIA VEHICLE SELECTION

Flux conducted the necessary research to determine the appropriate media vehicles to utilize for Mary Kays campaign. Our findings and selections are as follows:

TV Early and Late Fringe: high/low Average index of Q1: 108 Average index of Q5: 95Outdoor: high/low Average index of Q1: 111 Average index of Q2: 93Internet use at work: high/low Average index of Q1: 119 Average index of Q2: 77Print

VEHICLE SELECTION

RATIONALES

TVMass reach and cost-efficiency are the two primary benefits to using TV, and those are two benefits Flux in-tends to take advantage of. Of all forms of advertising, respondents to a survey conducted by GCI Magazine said the one medium that influences them most was TV (25%). [3]

Outdoor

Drawn from our psychographic research with Choices3, Flux determined that Mary Kay customers are more likely to purchase based on their feelings rather than objective information. We needed something that would make an impact with our target audience. Therefore, rather than choosing traditional forms of outdoor ad-vertising, Flux chose alternative, guerilla advertising that would connect with Mary Kays customers on a personal level.

Internet

Flux will rely heavily on social media as a form of ad-vertising for Mary Kays campaign. Our target audience strongly relies on social media as a form of communica-tion; by leveraging our campaign across various social media platforms, Mary Kay will gain the recognition and traction needed to compete with other top beauty brands.

Print

In the same survey conducted by GCI Magazine, mag-azines were the second most effective advertising medium for U.S. beauty consumers [4]. We have chosen Lucky, Allure and Vogue as our main vehicles, consider-ing the high composition that each of those magazines has. The subscribers of the these magazines comprise a large portion of our target audience, and many of them are Mary Kay users as well.

MEDIA BUDGET

ALLOCATION

IMC/Promotional efforts

$ 2,100,000

Outdoor/ Guerrilla

$ 2,000,000

TV early and late fringe$ 2,500,000

Print$ 2,500,000

LuckyVogueAllure

Internet/ Social Media

Copytesting$ 500,000

$ 400, 000

JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC

$769,226 $769,226 $769,226 $769,226 $769,226 $769,226 $769,226 $769,226 $769,226 $769,226 $769,226 $1538514 $10 M

TV

Early Fringe

Late Fringe

$96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $192,317 $1.25 M

$96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $96,153 $192,317 $1.25 M

Internet & Social

$38,461 $38,461 $38,461 $38,461 $38,461 $38,461 $38,461 $38,461 $38,461 $38,461 $38,461 $76929 $500 K

Outdoor/Guerilla

$153,846 $153,846 $153,846 $153,846 $153,846 $153,846 $153,846 $153,846 $153,846 $153,846 $153,846 $307,694 $2.0 M

PRINT

Lucky

Vogue

Allure

$64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $128,211.33 $833,333.33

$64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $128,211.33

$64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $64,102 $128,211.34

IMC PROMO

$161,538 $161,538 $161,538 $161,538 $161,538 $161,538 $161,538 $161,538 $161,538 $161,538 $161,538 $323082 $2.1 M

CopyTesting

$30,769 $30,769 $30,769 $30,769 $30,769 $30,769 $30,769 $30,769 $30,769 $30,769 $30,769 $61,541 $400 K

TOTAL

MEDIAFLOWCHART

$833,333.33

$833,333.34

CREATIVE CONCEPTS

Flux wanted to create a message for Mary Kay that would connect with the companys primary target audience in a way that related to them and made them feel like Mary Kay understands their age group. Flux came up with a number of creative alternatives for Mary Kays campaign. One of our ideas would have been focused on creating a new product line that featured more bright and vibrant colors that pop for the young-er audience. Another would have focused on various skin types and how Mary Kay can help its users main-tain healthy, beautiful skin. Our third concept, and the one we ended up choosing, focused on leaving nothing to chance and feeling confident after applying Mary Kay makeup.

Once our creative concepts were created, Flux conduct-ed concept testing among a group of 30 women that fit our target demographic criteria. Our findings are as follows:

65 percent of those surveyed approved of the concept chosen over the other two being considered.80 percent of respondents liked our campaign ideas over Mary Kays current ad campaignsOnly 30 percent needed further explanations of the campaign after seeing our ads

CREATIVE STRATEGY

The chosen tagline for Mary Kays new campaign is Leave nothing to chance. Most of the promotional ad-vertising for Mary Kay will be centered around this tag-line. Many of our spots will show a side by side compar-ison between a young woman who chose to apply Mary Kay makeup and one who didnt. The woman who chose to wear Mary Kay will be successful in her endeavors, while the one who didnt will fail.

Mary Kays guerilla campaign will utilize a series of wall-sized chalkboards that will be scattered across the nation on a number of university campuses. These chalkboards will prompt passersby to write their goals and ambitions on the chalkboards, filling in the blanks after the phrase, If life gives me the chance, I will. Flux is targeting the Northeast more heavily due to the offensive advertising strategy for that region. The boards will be placed on the following university cam-puses:

Northeast Penn State NYU Rutgers HarvardSouth Texas A&M

West UC BerkeleyMidwest Michigan State University

Mary Kays social campaign, on the other hand, will utilize the vibrant colors of nature to connect with its Gen Y consumers. Users can connect with Mary Kay by photographing beautiful, natural vistas and uploading them to Facebook. Mary Kay will then create a makeup product for that user based on the color scheme pro-vided, such as eyeshadow or mascara. In addition, Flux will utilize Instagram for video tutorials for the applica-tion of Mary Kays products for consumers to watch.

CREATIVEEXECUTION

TV

OUTDOOR

INTERNET/SOCIAL

THE GRAMMY AWARDSand

provided byA FULL MAKEOVER

INCLUDINGTICKETS TO

WIN A TRIP TO

for you and your best friendLOS ANGELES

and

Become an IBC and get the chance to..

SOCIAL MEDIA/

PRINT

PROMOTION & IMC EFFORTS

Flux will be conducting a contest among Mary Kay IBCs to better promote the role of IBCs within the compa-

ny, as well as to facilitate the accomplishment of Mary Kays secondary campaign objective. Current IBCs of any age will have their names put into a drawing for a chance to win an all expenses paid trip to the 2015 Grammys for themselves and a chosen friend if, and

only if, they recruit one or more IBCs within the target demographic of 18-25. Any woman within that target

demographic who becomes an IBC will also have their names placed in the drawing for them and a friend as

well.

COPY TESTING & EVALUATION

Flux fully expects Mary Kays new campaign to be a success. We will monitor the effectiveness of the cam-paign through a number of methods, including:

Social interaction and engagement using Radian6Sales monitoring and tracking through IBCsMonitoring the number of IBCs in the company and tracking the increase in IBC starter pack requests throughout the campaign period.Tracking increases or decreases in positive perception and brand awareness through online product reviews and other chatter pertaining to Mary Kay as a brand.

THANK YOU!

REFERENCESEmmert, J. (2012, June 01). 2012 dsn global 100: The top direct selling companies in the world. Retrieved from DirectSelling News website: http://directsellingnews.com/index.php/view/ dsn_global_100_the_top_direct_selling_companies_ in_the_world/P6#.UpvNzWSidDL

Silcox, B. D. (2013, March 01). Direct sellings billion dollar markets. Retrieved from DirectSelling News website: http://directsellingnews.com/index.php/view/di rect_sellings_billion_dollar_markets6#.UpvPUm SidDL

(2013, June 20). Us beauty consumers analyzed in new infographic. Retrieved from GCI Magazine website: http://www.gcimagazine.com/marketstrends/ consumers/women/US-Beauty-Consumers-Anal yzed-in-New-Infographic-212367011.html

Simmons OneView - Choices3