Marketing strategy frameworks and best practices

Mistine Marketing Strategy

Summary of Marketing Issues and Strategies

Mistine has experienced exceptional growth by targeting the mid-tier of the women's cosmetics and personal care market in Thailand. Their exceptional growth is attributable tot heir unique direct sales model that appeals to the aspirations of housewives, working men and women. Body care, personal care, make up, fragrance and skin care are their dominant product lines. The company averages an impressive two new product introductions a month, has successfully competed against Avon, Amway, Giffarine and other smaller regional competitors. With an investment of $3M into their it systems, Mistine has discovered that by raising the average price per item from $3 to $6 the companies can attain a significant gain in average order size from $27 to $45. All of these factors are contributing to positive revenue growth, with the company experiencing 15% during its latest financial period, achieving $258M in sales. Despite these impressive accomplishments, the company has exceptionally high personnel turnover, and has had limited success penetrating new markets.

SWOT Analysis

The following is an assessment of the company's strengths, weaknesses, opportunities and threats.

Strengths

Mistine has many strengths. Their new product introduction process is generating two new products per month, fueling a high level of activity and sales throughout its 860,000 direct selling network globally. The company has over 6,000 products for sale, have designed them to be resistant to the humidity and hotter Asian climates, so women will not have to re-do their make-up so much, and through aggressive advertising, creating an exceptionally strong brand for themselves. They have five product divisions encompassing body care, personal care, make-up, fragrance and skin care. The company has also pursued quality levels in their factories, attaining ISO900/9001 certification and have also opened production centers in other nations as well. All of this has been accomplished while sales have continues to increase. The company has also invested $3M in it system to further support their growing supply chain, retailing and direct selling network. The company also offers a very generous $50K life insurance coverage toe ach sales person as well.

Weaknesses

The company has had a series of confusing policies with regard to selling cycles, which initially at 3 weeks was forcing a back-end loading of sales periods. This was leading to sales being lost over time. As the company went to 26 periods, there was still confusion and sales were lost. There is significant churn in its direct sales organization, as the case states they have a 200% turnover rate. This is exceptionally high and very expensive to maintain, in training costs alone. The company is also struggling to find a way to expand into global foreign markets as well, and can't seem to break beyond the framework or mindset that worked so well in Thailand.

Opportunities

There are many opportunities for Mistine going forward. First, there is the potential of expanding into neighboring countries and regions that have significantly higher per capita incomes compared to Thailand. Singapore, the Middle East, China all have higher per capita incomes than Thailand. There is also the potential to expand into Laos, Cambodia and Vietnam. All of these expansion strategies would require the company to become much more adept at managing the 200% turnover they have however. The opportunity to use contract manufacturing to drive even greater new product development velocity is also a possibility; Mistine could double their run rate using contract manufacturers in their regions. Third, the company could also create a greater online presence and tailor it to their unique market requirements.

Threats

The threat of being overtaken by a global competitor, supply chain shortages, massive turnover greater than 200% and a tightening economy that slows spending on cosmetic and personal care items are all significant risks for Mistine. In addition to all of these, there is the risk of not being able to capture the next generation of consumers as well as they have for the mainstream market. Initial efforts have been somewhat successful, yet not exceptional in performance.

Problem Statement

How to keep Mistine relevant and in step with the next generation of cosmetics purchaser globally.

Three Strategic Alternatives

1. Create sub-brands as Proctor & Gamble has done for their products, giving each product area its own unique identity.

2. Create a specific series of product groups or divisions by region, with the Chinese, Indian, Russian and Brazilian ones being the highest priority. These four nations have the highest economic growth today and are often called the BRIC economies.