Mary Kay Cosmetics: Sales Force Incentives
Case Analysis
Mary Kay Cosmetics is a company known for providing women with exceptional opportunities for professional achievement and economic success and rewarding women for their success. Mary Kay Cosmetics uses several programs to motivate, recognize, and develop its beauty consultants, which include recognition in a monthly magazine, annual events, gifts and prizes and most importantly, financial incentives. At the heart of the financial incentives Mary Kay provides is the three car programs offered to beauty consultants at different stages of their career. The car programs have proven to be effective motivators; however the costs to the company have skyrocketed as the number of car winners as a percentage of beauty consultants has doubled, despite increases in program qualification requirements. The VIP car program is the main cause of concern for May Kay because of the large number of leased VIP cars, high interest rates and insurance premiums, and large losses on cars in service for short periods of time. Mary Kay's top management is now faced with finding a solution to rising program costs of their powerful incentive plan while maintaining sales force moral and motivation. The key issues that must be considered in finding a solution to the high costs of Mary Kay's Marketing Plan are how beauty consultants will respond to changes in the incentive plan and how implementing the necessary changes will affect the sales force.
One of the problems Mary Kay's top management found with raising program qualification requirements as a solution to reducing program costs is that in created a "rush" by beauty consultants to attain VIP status before the effective date of the progr...
... middle of paper ...
...ts of an incentive program are important to them, Mary Kay Cosmetics can revise their Marketing Plan successfully to save money and keep morale and motivation high.
Works Cited
Anonymous. (1991, January). Performance Through People Awards. Incentive, 165. Retrieved February 6, 2005, from ProQuest database.
Ash, Mary Kay. (2000, September). Time For a Change. Workforce, 79. Retrieved February 6, 2006, from ProQuest database.
George, J., & Jones, G. (2005). Understanding and Managing Organizational Behavior. New Jersey: Pearson Education, Inc.
Lawler, Edward E. III. (1994). Motivation in Work Organizations. San Francisco: Josey-Bass Publishers.
Locke, Edwin A. (2004). Linking Goals to Monetary Incentives. Academy of Management Executive, 18, 4.
Schuster, J., & Zingheim, P. (2000). Pay People Right. San Francisco: Josey-Bass Publishers.
As the salespeople’s immediate supervisor, it is the primary responsibility of the manager to provide proper training to enhance the salespersons’ effectiveness and improve their skills. Given the importance of having a productive and enthusiastic sales team, the manager needs to develop and manage effective reward and compensation packages to ensure a highly motivated and satisfied sales force. Sales managers also ensure that the company 's standards of professionalism, image, and branding are consistent with the sales team’s interaction with company customers. The manager 's presence also makes customers feel valued as well as provide credibility on behalf of the company (Pilling, Donthu, & Henson,
The Nordstrom department store empire has been one of the leading companies in the fashion market. They generated over 2.5 billion dollars in sales last year, yet they are facing several internal problems. While Nordstrom strives to have the best customer service in the industry, living by the “Nordstrom way” has caused some hardships on the companies’ employees. An in-depth analysis of the sales position at Nordstrom using the job characteristic model reveals that the job design may moderately increase employees intrinsic motivation, but it is lacking in several areas.
Due to the decline in sales Riordan has had to revise its sales approach and process to better serve customers, however, with the changes came more issues. Employees are concerned about the fairness of incentives and compensation and do not understand how that will translate effectively into the CRM system. Riordan has a very diverse workforce with a plethora of motivational needs, from valuing interesting work to larger paychecks. Riordan is not effectively communicating to all the various demographic groups within the company. Employees have revealed in the annual survey that many are not satisfied or challenged by their work, and do not feel adequately compensated for their efforts. Motivation is low, and employees do not feel they have sufficient opportunities for development or promotion. These issues have culminated to the point that many employees are actively looking for opportunities outside of Riordan (University of Phoenix, 2007).
Herbalife needs to secure a marketing/public relations consultant to assist them in preparing some effective marketing strategies. They have a great product that works for them. They have members that are only there to receive discounts. They need a strategy in place that can move the company to even higher sales. Most people have no clue what Herbalife is in the diet/nutritional supplement industry and even a higher number have no idea what the Casa Herbalife Program is, or what Herbalife Family Foundation does to help children’s lives. If a more precise marketing campaign was put into place this company would see record double digit increases.
In light of an evolving market, faced with new competitors, and after a careful analysis of their current customers, the Vanguard Group (hereinafter referred to as “Vanguard”) realizes it must rethink its entire marketing strategy. However, in order to protect and leverage their competitive advantage, which is their low management fees, and to optimize the loyalty that their customers continuously demonstrate toward their organization, they must now target the most profitable segment for them, and develop the best way to serve and delight these customers.
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
...to a large hotel and in a tourist destination. Associate behaviors and tenure impacts sales as well. The selling of intimate apparel is more involved than the average person realizes. A good understanding of what will work best for each client is key and new associates have not committed to memory all that is necessary for success. However, a tenured associate will know how and what the client needs and ensure that she leaves happy.
Six years after deciding to be an independent public company in late 2000, Coach Inc.’s net sales had grown at a compounded annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy keyed to a concept called accessible luxury. Coach crafted the accessible luxury category in women’s handbags and leather accessories by differentiating themselves on price, but matching competitors on styling, quality, and customer service. The accessible luxury strategy mirrors a focus (or market niche) strategy based on low costs. Coach concentrates on a narrow buyer segment and outcompetes rivals by having lower costs than rivals and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than on designers’ instincts. Coach utilized extensive consumer surveys and focus groups to gain insight in the market, and ultimately a competitive advantage over competition. Coach’s $200-$500 handbags appealed to both middle class consumers who now were able to afford a taste of luxury, as well as affluent consumers with the means to spend $2,000 on a handbag on a regular basis.
As we all know, marketing is a necessary part of our daily life. Not only are products and services marketed, but we market ourselves as part of everyday business. I spent time this week speaking with a close friend of mind who is a Store Manager for H&R Block discussing the 4-Ps and how they pertain to his organization. It was very interesting to see how different industries market their products and services. Does the thought of receiving your tax return immediately grasp your attention? Well it has definitely helped H&R Block in boosting their ability to attract customers. It seems as thought immediate gratification is a promotion marketing tool that many companies are now using. After briefly describing the 4 P's of marketing we will review how H&R Block utilizes all of the steps in their marketing mix.
This article is about Harrah’s Entertainment; one of the largest casino entertainments made a decision to move away from being a product based company to a strategic marketing company geared towards customer satisfaction by implementing a customer focused rewards program. Bill Harrah, the founder of the company established the company’s reputation on the premise of pride of the employees working for “the best in the business” while given more attention to the condition of the properties. However, when Gary Loveman joined the company as the new Chief operating officer, he made a move towards customer service. Gary Loveman hired Marilyn Winn, the head of Human Resources, to change how the company engaged in people development. Winn came up with a strategic plan to develop Harrah’s human capital. As a result, Winn is faced with the difficult task of improving employee motivation and job satisfaction in a rough economy after 9/11, which changed our nation forever. Although, the company gained market share it did not quite meet the company’s projected level.
Today, vast product selections require marketers to identify and understand their target market, and to ensure their message is specifically directed to, and clearly received by their target market. In Dove’s example, early marketing strategies targeted all woman who needed an alternative to harsh soaps. However, as soaps progressively became less harsh, the Dove brand required more strategic positioning in the minds of their consumer. When speaking to Dove’s re-positioning efforts, Flagg (2013), points out that while similar products associate brand image with slender, stereotypical models, Dove’s “2004 campaign for Real Beauty” (p.1) specifically targeted ordinary women, celebrating women’s diverse body shapes, and the importance of every woman feeling good about herself (p.1). With ever increasing product offerings entering the marketplace, marketers must clearly communicate to their target group why their product is right for them, as compared to other
Mary Wilson was both nervous and excited as she opened her first staff meeting in the marketing department of St. Margaret’s General Hospital (Clow & Baack, 2010, p. 49). Mary is the new Director of Marketing and Communications for St. Margaret’s Hospital and has been tasked with increasing St. Margaret’s Hospitals increased visibility and image in the eyes of the public (Clow & Baack, 2010). Her long term goal is to attract the best possible physicians while increasing use of the hospital’s facilities and attracting more patients (Clow & Baack, 2010, p.49). There are four questions that Mary most look at and address as the new Director of Marketing and Communication for St. Margaret’s. First, what are the image issues for St. Margaret’s Hospital? Second, what are the brand-name issues; and if so should the brand name
In this paper we will explore how advertisements cultivate a woman’s need for consumerism as a part of their own self image. George Gerbner, the founder of cultivation theory, argued that television has the ability to impact the way that people percieve certain message and influence their everyday life. In this study, we will conduct a content analysis of quantitative and qualitative measures that will study fashion advertisements. Each advertisement will be critiqued by a set of questions to help find any pattern or correlation between attributes that may have an impact on female consumers. A sample population will be drawn at random on three different occasions containing women from the ages of 18-30. In the first group each individual that is selected will be given a survey of questions. This set of questions will focus on the shaping of body image with the use of makeup, accessories, and clothing, and help identify trends between fashion and life style. The second sample group will participate in a focus group discussion that will be directed towards how women see themselves with regards to their own body image. The third group of women will complete a written survey before and after being exposed to television advertisements. This will test to see if advertisements entice woman to purchase products or change their personal portrayal.
Kotler, P., & Keller, K. (2012). Marketing management (14th ed., Global ed.). Boston, [Mass.: Pearson.