An absolutely fantastic discussion has begun on another post and I thought it appropriate to address it.
I think that it can be summed up with – should Mary Kay Corporate track actual sales in awarding prizes or should they continue to award prizes based on ordering with the assumption that the orders are based on sales?
The question, in and of itself, is fairly benign. Ask anyone that is involved in any industry that distributes product and you will probably get a response in the order of, “huh… who cares?”
Warning, semi-boring but quite necessary ‘ground work’ to follow – I will isolate it so you can skim.
Typically speaking, any product that you are using will “get to you” by a channel similar to the following. I will use beverages in this case, and specifically the carbonated variety (Soda, Pop, or Coke depending on where you live) and even more specifically, because everyone is familiar with this brand, I will use Coca Cola brands/products.
First, there will be a concept. Someone, for instance, will say, “I have an idea… let’s make a carbonated beverage with lots of sugar and sell it. (Anyone who knows the story of the origins of Coca-Cola will know that it was not that simple, but please understand I am simplifying for illustration sake and will similarly simplify the roots of Mary Kay momentarily.) That person (or those people) will then begin ‘the process’ of bringing their concept to market. As they develop their business model, there will be many steps that overlap each other in many ways. All of these steps should be planned with their end consumer in mind.
They will have to develop the product. They will have to develop packaging for their product. They will need to develop a brand identity for their product. They will need to create a marketing plan for their product. They will need to advertise their product. Advertising and marketing, although similar and often combined are two different components. They will need to create a channel or method of distributing their product. Then, they will need to continuously evaluate and improve on all of those things in an effort to maintain the demand for their product.
Because of the multitude of various options available to a producer of a product, each one will take on a unique strategy that will set it apart as different – maybe better, maybe worse – from everyone/everything else available. Take McDonalds and Burger King for instance. It is rumored (I don’t have any source for this, but it certainly seems possible) that McDonalds spent millions or possibly billions of dollars studying the demographics of every area that they launched a new location to determine the absolute BEST physical location for that store. Burger King’s strategy? Build a Burger King next to (or across the street from) a McDonalds. I say it seems possible because there is almost always a Burger King a stones throw from a McDonalds. (If anyone know whether this is a myth or not, please let me know) I use this illustration, true or not, to demonstrate that everyone will employ different strategies to accomplish the same outcome.
For those of you that were skimming, we are back!
Mary Kay is no different from any other manufacturer in principle.
They have a product.
They manufacture that product.
They create packaging for that product.
They have a clearly developed brand and brand image.
Where they are unique (compared to many of the other products that we are familiar with) is that they combine their advertising, (a majority of their) marketing, and their distribution into one venue. That is, they entrust the distribution and promotion of their product to individual representatives.
National companies that go the route of advertising spend a lot of money on that venture. I mean A LOT of money goes into advertising on a national level.
Again, if you want, you can just skim the following
For instance, Proctor and Gamble spent $4.8 Billion in 2006 and $5.2 Billion in 2007 in the United States alone. Proctor and Gamble (if you are not familiar with that name) is; Olay, Crest, Pantene, Gillette, Cover Girl, Febreze, Swiffer, Tide, Prilosec (otc), Oral-B, Secret, Clairol, Dayquil, Nyquil, Mr. Clean, Duracell, Iams, Head & Shoulders, Pampers, Charmin, Always, Actonel Rx, Bounty, Herbal Essences, Dawn, Old Spice, Tampax, Downy, Vicks, Max Factor, Pur, Folgers, Aussie, Cascade, ThermaCare, Metamucil, Pepto-Bismol, Pringles, Dolce & Gabbana, Braun, Gain, Tag, Puffs, Cheer, Fibersure, Luvs, Bounce and Fixodent – by ‘megabrand’ ordered from most money spent to least. They spent $394 Million on their Olay brand and a comparatively modest $11.3 Million on the Fixodent name.
In 2007, AT&T spent $3.2 Billion and Verizon and GM each spent $3.0 Billion. L’Oreal spent $1.6 Billion.
A LOT OF MONEY GOES INTO ADVERTISING.
Mary Kay has chosen to invest (spend if you will) this money on their consultants instead of on TV, Radio, Newspaper, Magazines, etc. Citing (among other things) that they want their product to be demonstrated in a one-on-one setting with the accompanying personal attention to detail, they have for the most part shunned traditional advertising and methods of distribution.
Is anyone still with me? I hope so! Now we can get into the question.
The simple question of whether or not Mary Kay should distribute/market in this manner is not worth discussing, because it IS the way they do it, and any contrary suggestion should be brought up with them.
However, the question of whether Mary Kay should track individual sales (rather than simply inventory orders) boils down to a more direct and accusatory question. Who is responsible when a consultant loses money?
One point of view is very keenly summed up by commentator ‘Enesvy’ (previously known as ‘Black Nova’
My issue is more human. I see MKC as a bus. They built the bus, they maintain the bus, they even provide drivers. People board the bus believing it to be safe and trusting those who introduce them to it and convince them to get on. Naive? Yes. But I can't fault anyone for not being a complete cynic and believing what somone with supposed experience in riding and/or driving that bus has to say. So when that bus is in an accident because it's not well-built, it has flaws, people riding it get hurt. My point of view is that MKC should be doing everything it can to ensure that their IBCs aren't hurt by their business model.
The other point of view – expressed by me… composed ‘just now’ is
There is nothing wrong with the bus. There is adequate training and information available to potential drivers. Potential drivers are ‘tested’ before being allowed to drive. The problem comes when a driver decides that she has thought of an excellent shortcut or ignores her training and starts speeding and cutting corners. Mary Kay Corporate, upon discovering such renegade drivers will implement disciplinary action, but just like the police here in Los Angeles (God bless them, they have a hard job), they WILL NOT get everyone that breaks the law. Many people have been badly injured and even killed on the streets of L.A. IF the LAPD and CHP could do a perfect job of policing this city, that number would be drastically reduced (or hypothetically eliminated entirely). IF Mary Kay could be everywhere at all times and hear every presentation, they would similarly meet (or come close to) the standard of perfection where no one is ever hurt.
As you have hopefully picked up from this, there are a lot of variables, and it is easy to get distracted by one element or another.
But this conversation is very important to have, so let us establish what this discussion is about, and what it is not about.
Let us assume for this conversation that Mary Kay Corporate is NOT out to get consultants. Evil as they may seem to some, it is illogical to assume that a corporation would exist simply to torment and ruin the lives of thousands of women.
Further, let us understand that, like it or not, they ARE a business. They are not a non-profit organization. Their primary purpose and reason for existence is to make money. This is NOT a bad thing. It also does not contradict their goal of enriching women’s lives. However, they are not here to just GIVE money away. If you want a piece of this pie, you are going to have to earn it. Please notice that I did not say you are going to have to work hard for it. I could sign up for Mary Kay and then go in my back yard and dig holes all day and night for years (hard work for sure – right!) and still not EARN anything.
The question here, is, “Who is responsible for the wreckage?”
From one direction, you have the ‘personal responsibility’ crowd. No matter how tantalizing something looks, no matter how much you trust someone that is suggesting something to you, no matter how influential and convincing someone is, you should always evaluate whether or not it is a good match for you. “I trust everyone. It's the devil inside them I don't trust.”
From the other direction, you have the ‘corporate responsibility’ crowd. Mary Kay is making a lot of money. If even one person loses money so that they can line their pockets (the rich get richer while the poor get poorer) with MORE money, they should be ashamed of themselves and do everything they can to make it right.
A philosophical discussion to be sure.
I can predict right now that the majority of those claiming ‘personal responsibility’ will be well adjusted within the Mary Kay structure while those claiming ‘corporate responsibility’ will be those that (at best) did not do well with Mary Kay.
Although I am sure that it is quite clear which ‘side of the isle*’ I am on, I will leave the question open ended for now.
*I know that ‘aisle’ is the correct word here, but I wish I were on a beautiful island right now – so I felt it appropriate to express my view as a ‘side’ of the ‘isle’ that I am on in my mind!
Where do YOU stand?