MISTINE: DIRECT SELLING IN THE THAI COSMETIC MARKET
HILLARY GALLAGHER
HARLEIGH RUUD
HARRISON McCORROW
AGENDA
Case Summary
Key Issues
Analysis
Recommendations
Implementation
Expected Outcomes
Conclusion
CASE SUMMARY:�MISTINE IS A COSMETIC BRAND OF BETTER WAY (THAILAND) CO.,LTD. WHICH IS NUMBER 1 COSMETIC BRAND AND COSMETIC DIRECT SALES DISTRIBUTOR IN THAILAND.
Uses Direct Sales Model
2014
Mistine is ranked the 33rd world's direct Selling and generated revenue of 407 million dollars.
2011
Employed more than 3,000 staff, joined by more than 1,000,000 direct sales reps worldwide, delivering 190 million units of its own products
2004
Mistine was run by the second generation of executives, led by Dr.Amornthep's son, Danai Derjanawong as new CEO
1988
Better Way (Thailand) Co., Ltd. was founded in 1988 and established cosmetic brand, namely "Mistine"
KEY ISSUES
Lower cost implies lower product quality
High salesperson turnover rate
Recognition and competition
INTERNAL ANALYSIS
Competitive advantage
Resources
Core competencies
Capabilities
INTERNAL ANALYSIS
V
O
I
R
Brand image: Sustainable competitive advantage
Strong global presence: Temporary competitive advantage
BRAND IMAGE
STRONG GLOBAL PRESENCE
Yes
Yes
Yes
Yes
No
Yes
No
Yes
EXTERNAL ANALYSIS
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EXTERNAL ANALYSIS
Power of buyers: high
The company runs off of its buyers
Power of suppliers: high
Many other successful makeup companies
Threat of substitutes: high
Many substitutes in this market
Threat of competitors: high
Competitors in the market that have similar products
Threat of new entry: low
There are already many cosmetic companies
Porter’s 5 forces
MARKETING MIX
Product
Makeup
Skin Care
Personal Care
Body
Fragrance
Promotion
Coupons and Promo Codes
Satisfaction Guarantee
Place
Direct Selling Industry
Online Retailers
Price
Targets middle to lower income market
Value Pricing- Cheap quality products
Competition
Targets teenagers and working women
Provides beauty tips and customer service
Medical roots, founded by a team of doctors and pharmacists
Developed and tested with highest standard of quality
Sells various consumer products, uses multi level marketing approach
Owns actual shops, Expensive products that are high quality
Positions itself to products directed towards asian skin tones
Popular among Thai housewives, factory workers and teenagers
STRATEGY CANVAS
STRENGTHS:
SWOT
WEAKNESSES:
THREATS:
OPPORTUNITIES:
Diversification (many internal strengths/many external threats)
+30
+15
-21
-27
RECOMMENDATIONS
2. Create a more masculine product-line for male customers
IMPLEMENTATION TIMELINE
| 2020 | 2021 | 2022 | 2023 | 2024 |
Create and manufacture new male product line | X | | | | |
Establish a marketing plan for male product line | | X | | | |
Launch new male product line | | | X | | |
Develop a new employment system (lower turnover rate) | | X | | | |
Raise brand awareness internationally | | X | | | |
Expand celebrity social media marketing | | | X | | |
Launch products to more international countries | | | | X | |
EXPECTED OUTCOME
Revenues | 495,000,000 |
Expenses | 115,000,000 |
Total | 380,000,000 |
| % of Budget | Cost | Benefit |
Male Product line | 30% | 34,500,000 | 148,500,000 |
Employment system | 20% | 23,000,000 | 99,000,000 |
Brand Awareness | 15% | 17,250,000 | 74,250,000 |
Social media marketing | 10% | 11,500,000 | 49,500,000 |
International products | 25% | 28,750,000 | 123,750,000 |
Total | 100% | 115,000,000 | 495,000,000 |
Expected Costs
| 2020 | 2021 | 2022 | 2023 |
Male Product Line | 34,500,500 | | | |
Employment System | | 23,000,000 | | |
Brand Awareness | | 17,250,000 | | |
Social Media Marketing | | | 11,500,000 | |
International Products | | | | 28,750,000 |
Total | 34,500,000 | 40,250,000 | 11,500,000 | 28,750,000 |
$115,000,000
CONCLUSION
Every year, all Mistine’s trucks travel more than 30 million kilometres to deliver its products to their customers door-to-door. That’s equivalent to the distance of 76 return trips from the Earth to the Moon.