Spencer Bogdanski Alli Ferlin Randy Vollrath Scott Raap MGT300 Dr. Dr. Jensen Je nsen eek ! Disc"ssion #"estions $ Mary Kay Cosmetics: Sales Force Incentives
% A. hat is Mary &ay's strategy( )o* do they add +al"e ,or the c"sto-er or in other *ords *hat is their +al"e proposition( According According to their -ission they add +al"e in part *ith their cons"ltants as cons"-ers. Mary &ay *ants to pro+ide *o-en *ith e/ceptional e/ceptional opport"nities ,or pro,essional achie+e-ent econo-ic s"ccess recognition personal de+elop-ent and independence Mary &ay also prides itsel, on its .
pree-inence pree-inence in the -an",act"ring distri"tion and -arketing -arketing o, personal care prod"cts y pro+iding personali1ed ser+ice +al"e con+enience and inno+ati+e sol"tions to cons"-er needs thro"gh an independent sales ,orce. Mary &ay operates co-ing ,ro- the asic principle o, doing "nto others as yo" *o"ld ha+e the- do "nto yo" and prioriti1ing God 2rst ,a-ily second and career third. third. Their entire Mary &ay syste- is ai-ed at pro-oting a s"ccess,"l career ,or the ea"ty cons"ltants eca"se to the c"sto-er the ea"ty cons"ltant is Mary &ay. Mary &ay addresses the needs o, the ea"ty cons"ltants 2rst y recogni1ing recogni1ing the needs Satis,action *ith a task *ell done tea-*ork opport"nity recognition and -oney. They address these needs thro"gh +ario"s aspects o, their "siness.
%B hat does Mary &ay need to do *ell to s"cceed at this strategy( 4s there e+idence that Mark &ay is doing *ell( )o* do *e kno*( 4n order to s"cceed in this strategy Mary &ay needs to -aintain their sales ,orce. They need to 2nd *ays to s"pport and enco"rage the- in order to ,or the- to not s"cceed "t -a/i-i1e their potential. Mary &ay prod"ces plenty o, *ritten -aterial ,or its cons"ltants as *ell as +ideos and a"diocassettes pro-otional sales aids and e+en a telephone hot line ,or ad+ice and ans*ers. This s"pport allo*s the cons"ltants to e ed"cated achie+e econo-ic s"ccess and recognition. Mary &ay Ash elie+ed that people co"ld e 5praised to s"ccess6 this led to the co-pany ,ostering a sales c"lt"re ased on positi+e rein,orce-ent and recognition. This *as achie+ed y allo*ing the independent cons"ltants to choose their o*n recr"its *hich increased the chances o, ha+ing a positi+e director7cons"ltant relationship. They also pro+ided g"idelines to assist the independent sales ,orce in -oti+ating and training its -e-ers. 8ne *ay is y praising -e-ers at "nit -eetings *hich ser+ed as a s"pport gro"p and training class and created an en+iron-ent that ,ostered s"ccess y olstering the sel,7con2dence o, the sta9. Mary &ay has een ale to keep their cons"ltants -oti+ated to increase sales and recr"iting y a*arding the- *ith pri1es and recogni1ing sta9 -e-ers ,or incre-ental progress. The na-es o, the *inners are p"lished in their -onthly -aga1ine Applause. :. hat co-ponents o, the 2nancial incenti+es progra- appear to e the pri-ary -oti+ators ,or the sales ,orce( Do these -eas"res align *ith their strategy and key per,or-ance +ariales(
Mary &ay's 2nancial incenti+e progra- incl"des co-pensation ad+ance-ent opport"nity pri1e incenti+es and recognition. This care,"lly designed package is *hat has s"ch high appeal ,or ea"ty cons"ltants to *ork ,or the-. There are no constraints ,or the sales ,orce to -ake as -"ch -oney as they can and essentially ha+e "nli-ited earning potential. They ha+e the potential to get the V4; car ,or : years i, they -aintain a certain le+el o, sales and recr"it-ent. This see-ed to e one o, the -ost appealing incenti+es to the sales ,orce eca"se in <"st a -atter o, a ,e* years a,ter introd"cing the V4; car re*ards the cars re*arded increased y 2+e ti-es. Mary &ay's co-pany philosophy stresses the i-portance o, helping their ea"ty cons"ltants to s"cceed y reaching their personal est *hich -akes the co-pany s"cceed as a *hole. This is sho*n thro"gh the incenti+es that they o9er. Their -ission is to e s"ccess,"l in -an",act"ring distri"ting and -arketing o, 5personal care prod"cts y pro+iding personali1ed ser+ice +al"e and con+enience to the c"sto-er's needs thro"gh o"r independent sales ,orce6=:>. 4n "sing these 2nancial incenti+es the co-pany is "rging their sales ,orce to e prod"cti+e in sales and thro"gh recr"iting ne* cons"ltants *hich is helping ,"rther their -ission and strategy as a co-pany. )o*e+er the cost o, the progra- speci2cally the car progra- escalated too ?"ickly p"tting pre+io"sly "nacco"nted ,or 2nancial stress on the co-pany's otto- line. 3. 7Descrie a typical cons"ltant in ter-s o, 7De-ographics 74nco-e
7Reasons ,or eing a Mary &ay cons"ltant The typical cons"ltant ,or Mary &ay is :! to @! years old has so-e college ed"cation and has another
!A
hat prole-s is Mary &ay c"rrently ,acing *ith respect to their car
progra-( The cost to Mary &ay o, leasing the cars had increased *ith interest rates a"to-oile ins"rance pre-i"-s had escalated ,aster than oth ination and prices o, Mary &ay prod"cts and General Motors discontin"ed the 8lds-oile Firen1a red"cing the resale +al"e o, the one7 and t*o7year7 old cars. Also *ith the V4; car progra- there *as a decrease in car 5ten"re6 cons"ltants *ho ?"ali2ed ,or the car *ere "nale to -aintain the re?"ired sales and recr"iting le+els ,or the :! -onth period. This -eant Mary &ay o,ten *as ,orced to reclai- cars that *ere s"stantially less than t*o years old. The ne*er a car *hen Mary &ay reclai-ed it ,ro- a cons"ltant the greater the disparity et*een the car's "na-orti1ed ook +al"e and the -"ch lo*er resale price that Mary &ay recei+ed ,or it. Mary &ay is looking ,or a *ay to -oti+ate s"stainale sales ,ro- their cons"ltants *itho"t losing so -"ch on the in+est-ent as they did *ith the car progra-.
!B Reco--end a set o, changes to the V4; car progra- that *ill i-pro+e o+erall sales ,orce e9ecti+eness at Mary &ay. Consider the strategic risks and cost e9ecti+eness o, yo"r proposals as *ell as ho* they co"ld e i-ple-ented. Be as speci2c as possile.
As disco+ered thro"gh di9erent trials the V4; car progra- has so-e a*s in it. 8ne o, the -a
this point a ,ree car is a ,ree car. Re"sing cars *ill help sa+e tho"sands o, dollars y not ha+ing to cancel leases or resell "sed cars that *ere once con2scated ,ro- cons"ltants. 4, need e the opport"nity to set a slightly lo*er per,or-ance standard to recei+e a "sed car is an a+ailale option to Mary &ay. An alternati+e to a slightly lo* per,or-ance standard *o"ld e a syste- o, checks and alances si-ilar to the 5cla*7ack6 proposals o9ered in proposed social sec"rity re,or-s. These cla"ses are already "tili1ed in se+eral di9erent ind"stries *ith great s"ccess. These co"ld acco"nt ,or the discrepancy in the a-o"nt o, +al"e o, a ne* car and "sed one. This type o, cla*7ack proposal *o"ld allo* to Mary &ay to positi+ely end the cost c"r+e in the o"t years. A cla*7ack cla"se in ne* contracts *o"ld e a good co"nter*eight to allo* ,or "n,oreseen shi,ts in "siness as *ell as per,or-ance. This not only re*ards good e-ployees it in addition pro+ides -oti+ation ,or all e-ployees.
