Market Strategy 2
Content
Mary Kay Cosmetics Analysis Executive Summary Mary Kay Cosmetics must continue to develop globally, in an effort to increase net revenue and gain international brand awareness, specifically capitalizing on the opportunities existing in the Asian market. • • • • MKC current international sales account for only 11% of total sales, while competitors Avon and Amway derive 55% and 75% respectively from international sales, indicating MKC need to expand globally. Asia would provide substantial opportunities for the international expansion of MKC due to Asia’s quickly evolving regions, high use of cosmetics, and expected share of the worlds GDP (32% by 2002). Japan is recommended as the location to form an initial Asian base because of its relative ease of entry into the market and its barometer-like status for judging success for the expansion of MKC into other Asian regions. In order to be successful in the Asian market, modifications of communication, pricing, training, and product strategies must be implemented to fit the culture of the local regions.
Situation Analysis of International Operations Strengths • General company philosophy and culture is likely to appeal to women worldwide • Efficient processing and delivery distribution system • Unique skin care system consisting of recognized quality products • Effective beauty consultant incentive program which can be adapted to fit local regions • Proven successful direct-selling methods • Internationally appealing marketing strategies • Established global resource group and regiona l international sales headquarters Weaknesses • International sales revenue represents only 11% of MKC $1 billion total sales. This is low when compared to the revenue generated internationally by direct competitor Avon and other direct-selling organizatio ns.
Intenational v. Total Sales Revenue
Intl % of Total Sales Thousands 4000 3000 2000 1000 0 MKC Avon Amway Tupperwa re 80% 60% 40% 20% 0% International Sales Total Sales % Internatinal Sales
• • • • • • •
Product adaptation does not take place to appeal to international tastes, preferences, and pricing structures Low international brand awareness (excluding Mexico) Party-plan method and length/format of skin care classes not culturally accepted in some regions Sales force training is not adequate in some regions Lack of international charismatic leaders Small amount of SKU’s compared to other international competitors (Avon, Amway) Packaging not appropriate to international consumers
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Opportunities • Implementation of Buying Clubs • General international appeal for imported makeup • Experienced international managers available for employment from competitive companies • Lower average wages required for international work force • Direct-selling method already established and successful internationally (Avon, Tupperware) • Few direct-selling party-based cosmetic companies in international markets • Expected growth of the Asian GDP to reach 32% of the worlds GDP by 2000 Threats • Rising tariffs being implement on imported products • Decrease in profit margins due to depressed markets, low exchange rates, and low purchasing power • Preference, in many international regions, for local skin care cosmetic brands rather than imports • Devaluation of foreign currency • Political instability delaying economic reforms among conservatives and reformers • Government regulations on products • Mature cosmetic markets already exist in some regions • Possibility of rapid inflation due to unstable international economies. • Communication issues and cultural barriers limiting direct sales methods used by MKC consultants
Recommendation for Asian Market
Asia is developing into one of the fastest growing continents in the world. Market research was recently completed to determine a profitable location in Asia. Based on the research, it is recommended that MKC establish a subsidiary in Japan for the sale and manufacturing of MKC skin care and shaded makeup. In Japan, the cosmetic market is very lucrative, direct-selling is profitable, and the general population has a relatively high amount of purchasing power. Therefore, the sale of MKC would be a fairly smooth transition into the Japanese culture, provide a firm base for future Asia expansion, and involve less market risk than would be experienced in other Asian countries. MKC Culture vs. Japanese Culture MKC must exist in a region which contains a qualified and available female sales force. The Japanese culture appears to correspond well with the MKC culture and company philosophy as indicated below: “The Mary Kay career path allows a woman to advance into a management/training position if she so wishes.” According to a 1990 survey, Japanese women (ages 25-43) believed important attributes of a job includes one that has a flexible time schedule, promotes women, and allows women to continue employment while married and/or with children. MKC offers part-time and full-time positions, offers unlimited opportunities for women, and provides a completely flexible work schedule. “Mary Kay is a direct-selling organization” In 1992, over 1 million women in Japan were already involved in direct sales. The majority of the women in the workforce were on a part-time basis, a trait of the average MKC sales woman. Also, an economic recession created increased demand for part-time jobs to supplement household incomes. Therefore, the most essential item for the successful implementation of MKC products into a market place was already established – an available female direct sales force who prefers the business culture provided by MKC. “The company does not compete with its consultants by offering products at retail locations, salons, or via ‘buying club’ discounts.” MKC became profitable due to the direct sales of their products by employed beauty consultants. Japan was an established haven for direct sales, accounting for an estimated $19.2 billion in retails sales. MKC has a very similar structure to Amway, a very successful direct-sales company recording sales of $1.2b in Japan in 1991. Therefore, direct sales are a proven method of distribution in Japan.
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“A Mary Kay Consultant is in business for herself, but never by herself. She receives ongoing training, recognition, and motivation from the company and her director.” The concept of team and the desire to belong to a group or organization is a popular value of the Japanese culture. The Japanese also value continued education for self-improvement purposes. The MKC Company believes in support systems, mentoring, and training. Wholesale Purchasing The MKC direct-selling method requires the consultant to purchase a minimum of $180 of products, every 3 months, to remain active. The average hourly compensation of a Japanese worker is $14.41 (compared to $.24 in China), therefore, the normal method of wholesale distribution used at MKC remains practical. Recruitment and Training The average Japanese women values education and takes pride in developing new skills. With the high concentration of the population in urban areas (77% - 865 people per square mile), it would be a relatively easy logistical process to provide orientation and training to a Japanese sales force. It may prove profitable for MKC to invest in 3-5 salaried employees and a country manager, with specific performance incentives, to establish the MKC subsidiary in Japan (this proved successful with the Mexican subsidiary). The salaried employees could help to establish the MKC brand name, develop local pricing and product adaptations, train/recruit consultants, and communicate actively with the US global resource group. The country manager would act as a partner, tailoring the MKC values to the local consultants. Based on previous international experiences, US sales directors should initially assist in the recruitment of Japanese consultants. Product Adaptation In 1992, MKC was having very limited success in Australia due to limited product modification to local market conditions. Products were directly imported from the US and sold at US prices. This most likely translated into low sales in the Australia market. In Japan, it is suggested that the products and prices be adjusted to be competitive in the Japanese market place. In 1992, skin care products made up approximately 40% of the total Japanese cosmetic sales while makeup accounted for 23%. Japanese women preferred skin care products from Japanese manufactures because of the belief that local manufactures better understand their needs. Yet, Japanese women preferred imported makeups, due to their inherent interest to prefer the current trends of the Western world when purchasing and applying makeup. However, since MKC promotes skins care “systems”, it is important to market both skin care and makeup products. Therefore, it is recommended that MKC utilize the 60/40 Avon-inspired market mix in Japan – the former being US produced makeup, the latter being Japanese manufactured skin care products. This would require partnering with a local Japanese manufacturer to assist in the development of specified skin care products under the MKC name. As research indicates, whitening and wet/dry foundation products may also be included in the mix due to their popularity in Japan. Market Place & the Consumers The Japanese marketplace is also well suited for MKC products. In 1992, over $9b was spent on cosmetics with an average women over 15 years old spending $400 each year on cosmetics. The heaviest users, women in their 20’s and 30’s, are less sensitive to price and more interested in quality. Also, Japanese women spend almost three times more on skin care than women in the U.S. Therefore, the market appears to be very profitable with an established customer base containing a relatively high amount of disposable income. Preliminary estimates of first year market entry indicate Japan will produce a $9.45 gross margin per unit sold, compared to $2.02 in China. This is due to a higher amount of disposable income and higher average hourly compensation among the Japanese citizens (Japan $14.41 vs. China $0.24). Competitive Advantages Although many of the major Japanese manufacturing companies are well established, few are currently experiencing high growth rates. This indicates that MKC must distinguish itself among competitors to compete for a share of the cosmetic’s market.
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Party Plan - The most successful international direct-sale’s company to use the “party-plan” method is Tupperware. Approximately 75% of their business is conducted internationally. In Japan, the “party-plan” method is virtually nonexistent for the sale of cosmetics. Sales are most commonly generated though department stores (25.2%), cosmetic stores (37.5%), and drug stores (22.3%). Avon utilizes the person-to-person sales method. Therefore, the MKCinspired party-plan method could provide MKC with a substantial opportunity and competitive advantage. Educating Customers - Based on the sales techniques offered by competing Japanese cosmetic companies, few truly educated their customers on skin care and glamour. Part of the MKC mission statement is to teach women, through employed beauty consultants, how to care for their skin and use cosmetics correctly. As indicated, Japanese consumers value education when making purchasing decisions. This is a new approach in the Japanese cosmetic industry and would offer MKC a niche in the market. Skin Care System - Some of the direct sales companies operating in Japan, such as Pola and Avon, maintain a large sales force but do not appear to promote a skin care system, but rather individual products. This gap in the market could provide a niche for MKC to fill. The Japanese place much value on their skin and on education, a mix that fits well with the approach that MKC utilizes with customers. By selling the complete skin care system, the makeup portion of the system could be used to induce consumers to try new skin care products through cross-promotion. Potential Problems and Possible Solutions with the Japanese Market Lengthy product approval process by the Japanese Ministry of Health MKC already invested over $1m in preparing for health approval aspects of the market. By being proactive in this category, approval may be granted before sales would be delayed. High start-up investment costs Due to high advertising and product development costs, the investment required by MKC is higher than would be in other Asian countries. This may indicate a higher risk to enter the Japanese market. However, the direct-selling and marketing techniques MKC utilizes have proved historically to be effective in Japan, whereas in other Asian countries, this is not the true. Strict regulations governing imports MKC can establish partnerships with Japanese skin care manufacturers to limit the amount of products imported into Japan, leading to less review by the regulators. Initial negotiations have already taken place with a private-label Japanese manufacturer who could produce up to 20% of a specified product line. Expected 3-5 years for MKC to turn a profit in Japan Although profits may initially be delayed, Japan represents an established market with many competitors of which MKC can learn from and benchmark. Therefore, MKC will not have to work at the grassroots level to convince customers to buy cosmetics. Also, much of the marketing strategies learned and established while in Japan may also be transferred to other Asian marketplaces. The 4 P’s to Marketing MKC in China Product Features • Include skin whitening products due to their popularity in the Chinese culture • Apply a 60/40 product mix, with the former being imported MKC makeup and the latter being skin care products, manufactured and adapted to local preferences through a partnership with a local manufacturers. • Limit the product line to 150 items to make the transition into China simple and easy for consultants to manage (as proved by Shiseido, a small product line can still lead to high sales). Packaging • Cosmetics will be placed in plastic or glass bottles, simple labels with both Chinese and English inscriptions, instruction on thin paper (in both English and Chinese) with words and illustrations to accompany the product,
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and limited use of outer packaging. The packaging will be designed to project an image of quality with limited use of the color pink due to cultural associations with children’s products. Pricing MKC must begin to adjust pricing strategies base on local market conditions (avg. hourly compens. = $.24). • Apply relatively premium pricing compared to local brands (The Chinese population will pay up to 8x’s the retail price for imported goods and 15x’s the retain price for Western/Chinese joint venture goods) • Avon, the only direct cosmetic seller in China, averaged $4.00 (retail price) per item. MKC may want to use this as a basis for initial sales in China. Placement Region Since MKC is looking to initially develop a firm base to build its Asian operations, Shanghai is a natural choice to initially setup operations because it is: • The largest principle region in China with a population of 60 million (13.5 in the city) • The commercial and cultural center of China • The highest region in China for consumers spending on personal care products • Recognized as being the trend-setter for the rest of China Distribution • Employ 2 salaried country managers to oversee local marketing strategies, training, and recruitment. • Send 3-5 US employees to Shanghai to initially oversee and attract recruits (as done in Mexico) • Employ consultants, on a similar payment structure as other international ventures, with the follow items emphasized due to the limited income of the general Chinese population: 1.) Consultant training will be provided free of charge 2.) Initial set-up fees, required by consultants to begin selling products, will be reduced. 3.) Lower beauty consultant purchase commitments will be established. Promotion Advertisements • Focus on regional television commercials, due to their popularity and lack of censorship, utilizing joint venture partnerships created to obtain pricing discounts. TV advertising is inexpensive in China and should be utilized substantia lly, especially during Chinese holidays, to gain brand recognition ($.50 per 1,000 people). • Very limited use of radio and print advertising due to it lack of effectiveness in China. Beauty Consultants • Advertise as a quality skin care system – the Chinese Ministry of Commerce recently developed a program to train 2 million cosmetic managers, consultants, and purchasers on how to appraise the quality of cosmetics. This should bode well in attracting consultants since MKC is known for their quality skin care systems. • Incentives will be changed to provide top sales consultants with MKC funded housing and other items practical to improving everyday life. Customers • Family Party-Plans – the average 1 bedroom apartment in China is 200 square feet and young single and married adults typically live with their parents. Due to these circumstances, it may stand logistically impossible to bring large groups together in such a small area. However, since many families live together and may not mind the closeness, there exists an opportunity to have party-plans exclusively for families. • Target Market – the average Chinese women who purchases cosmetics is 20-35 years old, lives in the city, spends disposable income on Western cosmetics, and considers cosmetics important. Therefore, advertisements will initially focus on the 20-35year old age group.
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Situation Analysis of International Operations Strengths • General company philosophy and culture is likely to appeal to women worldwide • Efficient processing and delivery distribution system • Unique skin care system consisting of recognized quality products • Effective beauty consultant incentive program which can be adapted to fit local regions • Proven successful direct-selling methods • Internationally appealing marketing strategies • Established global resource group and regiona l international sales headquarters Weaknesses • International sales revenue represents only 11% of MKC $1 billion total sales. This is low when compared to the revenue generated internationally by direct competitor Avon and other direct-selling organizatio ns.
Intenational v. Total Sales Revenue
Intl % of Total Sales Thousands 4000 3000 2000 1000 0 MKC Avon Amway Tupperwa re 80% 60% 40% 20% 0% International Sales Total Sales % Internatinal Sales
• • • • • • •
Product adaptation does not take place to appeal to international tastes, preferences, and pricing structures Low international brand awareness (excluding Mexico) Party-plan method and length/format of skin care classes not culturally accepted in some regions Sales force training is not adequate in some regions Lack of international charismatic leaders Small amount of SKU’s compared to other international competitors (Avon, Amway) Packaging not appropriate to international consumers
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Opportunities • Implementation of Buying Clubs • General international appeal for imported makeup • Experienced international managers available for employment from competitive companies • Lower average wages required for international work force • Direct-selling method already established and successful internationally (Avon, Tupperware) • Few direct-selling party-based cosmetic companies in international markets • Expected growth of the Asian GDP to reach 32% of the worlds GDP by 2000 Threats • Rising tariffs being implement on imported products • Decrease in profit margins due to depressed markets, low exchange rates, and low purchasing power • Preference, in many international regions, for local skin care cosmetic brands rather than imports • Devaluation of foreign currency • Political instability delaying economic reforms among conservatives and reformers • Government regulations on products • Mature cosmetic markets already exist in some regions • Possibility of rapid inflation due to unstable international economies. • Communication issues and cultural barriers limiting direct sales methods used by MKC consultants
Recommendation for Asian Market
Asia is developing into one of the fastest growing continents in the world. Market research was recently completed to determine a profitable location in Asia. Based on the research, it is recommended that MKC establish a subsidiary in Japan for the sale and manufacturing of MKC skin care and shaded makeup. In Japan, the cosmetic market is very lucrative, direct-selling is profitable, and the general population has a relatively high amount of purchasing power. Therefore, the sale of MKC would be a fairly smooth transition into the Japanese culture, provide a firm base for future Asia expansion, and involve less market risk than would be experienced in other Asian countries. MKC Culture vs. Japanese Culture MKC must exist in a region which contains a qualified and available female sales force. The Japanese culture appears to correspond well with the MKC culture and company philosophy as indicated below: “The Mary Kay career path allows a woman to advance into a management/training position if she so wishes.” According to a 1990 survey, Japanese women (ages 25-43) believed important attributes of a job includes one that has a flexible time schedule, promotes women, and allows women to continue employment while married and/or with children. MKC offers part-time and full-time positions, offers unlimited opportunities for women, and provides a completely flexible work schedule. “Mary Kay is a direct-selling organization” In 1992, over 1 million women in Japan were already involved in direct sales. The majority of the women in the workforce were on a part-time basis, a trait of the average MKC sales woman. Also, an economic recession created increased demand for part-time jobs to supplement household incomes. Therefore, the most essential item for the successful implementation of MKC products into a market place was already established – an available female direct sales force who prefers the business culture provided by MKC. “The company does not compete with its consultants by offering products at retail locations, salons, or via ‘buying club’ discounts.” MKC became profitable due to the direct sales of their products by employed beauty consultants. Japan was an established haven for direct sales, accounting for an estimated $19.2 billion in retails sales. MKC has a very similar structure to Amway, a very successful direct-sales company recording sales of $1.2b in Japan in 1991. Therefore, direct sales are a proven method of distribution in Japan.
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“A Mary Kay Consultant is in business for herself, but never by herself. She receives ongoing training, recognition, and motivation from the company and her director.” The concept of team and the desire to belong to a group or organization is a popular value of the Japanese culture. The Japanese also value continued education for self-improvement purposes. The MKC Company believes in support systems, mentoring, and training. Wholesale Purchasing The MKC direct-selling method requires the consultant to purchase a minimum of $180 of products, every 3 months, to remain active. The average hourly compensation of a Japanese worker is $14.41 (compared to $.24 in China), therefore, the normal method of wholesale distribution used at MKC remains practical. Recruitment and Training The average Japanese women values education and takes pride in developing new skills. With the high concentration of the population in urban areas (77% - 865 people per square mile), it would be a relatively easy logistical process to provide orientation and training to a Japanese sales force. It may prove profitable for MKC to invest in 3-5 salaried employees and a country manager, with specific performance incentives, to establish the MKC subsidiary in Japan (this proved successful with the Mexican subsidiary). The salaried employees could help to establish the MKC brand name, develop local pricing and product adaptations, train/recruit consultants, and communicate actively with the US global resource group. The country manager would act as a partner, tailoring the MKC values to the local consultants. Based on previous international experiences, US sales directors should initially assist in the recruitment of Japanese consultants. Product Adaptation In 1992, MKC was having very limited success in Australia due to limited product modification to local market conditions. Products were directly imported from the US and sold at US prices. This most likely translated into low sales in the Australia market. In Japan, it is suggested that the products and prices be adjusted to be competitive in the Japanese market place. In 1992, skin care products made up approximately 40% of the total Japanese cosmetic sales while makeup accounted for 23%. Japanese women preferred skin care products from Japanese manufactures because of the belief that local manufactures better understand their needs. Yet, Japanese women preferred imported makeups, due to their inherent interest to prefer the current trends of the Western world when purchasing and applying makeup. However, since MKC promotes skins care “systems”, it is important to market both skin care and makeup products. Therefore, it is recommended that MKC utilize the 60/40 Avon-inspired market mix in Japan – the former being US produced makeup, the latter being Japanese manufactured skin care products. This would require partnering with a local Japanese manufacturer to assist in the development of specified skin care products under the MKC name. As research indicates, whitening and wet/dry foundation products may also be included in the mix due to their popularity in Japan. Market Place & the Consumers The Japanese marketplace is also well suited for MKC products. In 1992, over $9b was spent on cosmetics with an average women over 15 years old spending $400 each year on cosmetics. The heaviest users, women in their 20’s and 30’s, are less sensitive to price and more interested in quality. Also, Japanese women spend almost three times more on skin care than women in the U.S. Therefore, the market appears to be very profitable with an established customer base containing a relatively high amount of disposable income. Preliminary estimates of first year market entry indicate Japan will produce a $9.45 gross margin per unit sold, compared to $2.02 in China. This is due to a higher amount of disposable income and higher average hourly compensation among the Japanese citizens (Japan $14.41 vs. China $0.24). Competitive Advantages Although many of the major Japanese manufacturing companies are well established, few are currently experiencing high growth rates. This indicates that MKC must distinguish itself among competitors to compete for a share of the cosmetic’s market.
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Party Plan - The most successful international direct-sale’s company to use the “party-plan” method is Tupperware. Approximately 75% of their business is conducted internationally. In Japan, the “party-plan” method is virtually nonexistent for the sale of cosmetics. Sales are most commonly generated though department stores (25.2%), cosmetic stores (37.5%), and drug stores (22.3%). Avon utilizes the person-to-person sales method. Therefore, the MKCinspired party-plan method could provide MKC with a substantial opportunity and competitive advantage. Educating Customers - Based on the sales techniques offered by competing Japanese cosmetic companies, few truly educated their customers on skin care and glamour. Part of the MKC mission statement is to teach women, through employed beauty consultants, how to care for their skin and use cosmetics correctly. As indicated, Japanese consumers value education when making purchasing decisions. This is a new approach in the Japanese cosmetic industry and would offer MKC a niche in the market. Skin Care System - Some of the direct sales companies operating in Japan, such as Pola and Avon, maintain a large sales force but do not appear to promote a skin care system, but rather individual products. This gap in the market could provide a niche for MKC to fill. The Japanese place much value on their skin and on education, a mix that fits well with the approach that MKC utilizes with customers. By selling the complete skin care system, the makeup portion of the system could be used to induce consumers to try new skin care products through cross-promotion. Potential Problems and Possible Solutions with the Japanese Market Lengthy product approval process by the Japanese Ministry of Health MKC already invested over $1m in preparing for health approval aspects of the market. By being proactive in this category, approval may be granted before sales would be delayed. High start-up investment costs Due to high advertising and product development costs, the investment required by MKC is higher than would be in other Asian countries. This may indicate a higher risk to enter the Japanese market. However, the direct-selling and marketing techniques MKC utilizes have proved historically to be effective in Japan, whereas in other Asian countries, this is not the true. Strict regulations governing imports MKC can establish partnerships with Japanese skin care manufacturers to limit the amount of products imported into Japan, leading to less review by the regulators. Initial negotiations have already taken place with a private-label Japanese manufacturer who could produce up to 20% of a specified product line. Expected 3-5 years for MKC to turn a profit in Japan Although profits may initially be delayed, Japan represents an established market with many competitors of which MKC can learn from and benchmark. Therefore, MKC will not have to work at the grassroots level to convince customers to buy cosmetics. Also, much of the marketing strategies learned and established while in Japan may also be transferred to other Asian marketplaces. The 4 P’s to Marketing MKC in China Product Features • Include skin whitening products due to their popularity in the Chinese culture • Apply a 60/40 product mix, with the former being imported MKC makeup and the latter being skin care products, manufactured and adapted to local preferences through a partnership with a local manufacturers. • Limit the product line to 150 items to make the transition into China simple and easy for consultants to manage (as proved by Shiseido, a small product line can still lead to high sales). Packaging • Cosmetics will be placed in plastic or glass bottles, simple labels with both Chinese and English inscriptions, instruction on thin paper (in both English and Chinese) with words and illustrations to accompany the product,
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and limited use of outer packaging. The packaging will be designed to project an image of quality with limited use of the color pink due to cultural associations with children’s products. Pricing MKC must begin to adjust pricing strategies base on local market conditions (avg. hourly compens. = $.24). • Apply relatively premium pricing compared to local brands (The Chinese population will pay up to 8x’s the retail price for imported goods and 15x’s the retain price for Western/Chinese joint venture goods) • Avon, the only direct cosmetic seller in China, averaged $4.00 (retail price) per item. MKC may want to use this as a basis for initial sales in China. Placement Region Since MKC is looking to initially develop a firm base to build its Asian operations, Shanghai is a natural choice to initially setup operations because it is: • The largest principle region in China with a population of 60 million (13.5 in the city) • The commercial and cultural center of China • The highest region in China for consumers spending on personal care products • Recognized as being the trend-setter for the rest of China Distribution • Employ 2 salaried country managers to oversee local marketing strategies, training, and recruitment. • Send 3-5 US employees to Shanghai to initially oversee and attract recruits (as done in Mexico) • Employ consultants, on a similar payment structure as other international ventures, with the follow items emphasized due to the limited income of the general Chinese population: 1.) Consultant training will be provided free of charge 2.) Initial set-up fees, required by consultants to begin selling products, will be reduced. 3.) Lower beauty consultant purchase commitments will be established. Promotion Advertisements • Focus on regional television commercials, due to their popularity and lack of censorship, utilizing joint venture partnerships created to obtain pricing discounts. TV advertising is inexpensive in China and should be utilized substantia lly, especially during Chinese holidays, to gain brand recognition ($.50 per 1,000 people). • Very limited use of radio and print advertising due to it lack of effectiveness in China. Beauty Consultants • Advertise as a quality skin care system – the Chinese Ministry of Commerce recently developed a program to train 2 million cosmetic managers, consultants, and purchasers on how to appraise the quality of cosmetics. This should bode well in attracting consultants since MKC is known for their quality skin care systems. • Incentives will be changed to provide top sales consultants with MKC funded housing and other items practical to improving everyday life. Customers • Family Party-Plans – the average 1 bedroom apartment in China is 200 square feet and young single and married adults typically live with their parents. Due to these circumstances, it may stand logistically impossible to bring large groups together in such a small area. However, since many families live together and may not mind the closeness, there exists an opportunity to have party-plans exclusively for families. • Target Market – the average Chinese women who purchases cosmetics is 20-35 years old, lives in the city, spends disposable income on Western cosmetics, and considers cosmetics important. Therefore, advertisements will initially focus on the 20-35year old age group.
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