Case Mary Kay Cosmetics
Hinkle, Charles L. and Steinman, Esther F. CASES IN MARKETING MANAGMENT: Issues for the 1980s Prentice-Hall, Inc., 1984 CASE 26 MMAARRYY KKAAYY CCOOSSMMEETTIICCSS,, IINNCC.. BACKGROUND OF THE COMPANY A proliferation of products and a change of partners that might dazzle a square dance caller have characterized the cosmetics industry in the late 1970s and the 1980s. Witness Eli Lilly’s purchase of Elizabeth Arden, Squibb’s acquisition of Lanvin-Charles of Ritz, Pfizer’s take-over of Coty, Norton Simon’s of Max Factor, Colgate-Palmolive’s of Helena Rubenstein, not to mention British-American Tobacco’s gobbling up Germaine Monteil. Accompanying the change of corporate identities there has been a distinct shift in management styles as practiced in cosmetics concerns. The “flair and flamboyance” of the old school cosmetics moguls—the Revsons, Rubensteins, and Ardens of the industry—has been replaced by a new breed of management types. Charisma has given way to pragmatism. The new styles are diverse, however—as urbane, cool, and international as ITT-trained Revlon’s chief executive, the Frenchman Michel Bergerac, or as fundamentalist, nouveaux riches, and Texas-grown as Mary Kay Ash, founder and driving force behind Mary Kay Cosmetics, Inc., whose pink Cadillac incentive plan for sales agents and skyrocketing corporate profits have made Mary Kay a legend in the highly competitive American cosmetics business. In 1963 Mary Kay Ash, a much decorated veteran of in-home sales (Child Psychology Bookshelf, Stanley Home Products, World Gift) founded Mary Kay Cosmetics, Inc., on $5,000 for product formulas, containers, and secondhand office equipment and on the belief that women could be sold on using a proven skin care regimen through an educational approach.
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