Case Study: Better Way Company Limited Better Way (Thailand) Company Limited was founded in 1988 by Thailand’s ‘king of direct selling,’ Dr Amornthep Deerojanawong and Boonyakiat Chokwatana. Dr Amornthep had worked as a medical doctor at Avon in Thailand where he got the idea to start his own Thai-based cosmetics company. The company has become highly successful in Thailand using direct sales to launch its Mistine cosmetic brand. Although Thai people were not very familiar with the direct sale of cosmetics, within six years Mistine had become the leader in the consumer cosmetics market in Thailand, a market worth an estimated 25 billion baht (US $635 million) and growing at a rate of 5-10% annually. Better Way began with fewer than ten employees and 100 products. Today, there are approximately 600,000 Mistine salespersons nationwide selling more than 4,000 makeup, skin-care, fragrance, and personal-care products. In addition, the company operates one retail store on the outskirts of Bangkok. Its warehouse is considered the largest cosmetics depot in Southeast Asia with 1,170 regular employee staff. The company primarily targets women who have a high school, occupational certificate level, or high occupational certificate level of education, and have a monthly income of about US $125-200, as well as working women who have a monthly income of about US $200-300. Mistine’s core target group, which accounts for 70-80% of its total revenues, are housewives with low to medium incomes. The company is expanding its customer base by targeting working people, men, and vocational school students, especially working people who have high purchasing power. There are now more than 420,000 customers nationwide. Mistine positions itself as an Asian company marketing products developed and formulated specifically for the Asian woman. They are designed to blend well with the Asian skin tone and complexion. They are also made to better suit the warmer, more humid climate of the Asian region, so that the product stays on longer and looks fresher. Mistine’s Marketing Mix Mistine products are manufactured by the best quality cosmetics manufacturers all over the world. Additional support is provided by Kolmar Laboratories, the largest and most experienced cosmetics manufacturer in the United States. An experienced production team develops hundreds of new and unique products each year, with at least two to three new products launched each month. Every Mistine product is thoroughly inspected and tested before being delivered to the warehouse. Customers can be assured that they will receive the highest quality products, and, indeed, Mistine will replace or offer a full refund for any product with which a customers is not completely happy. ‘Our customer’s satisfaction is what we care about the most’ is one of Mistine’s slogans, which helps it to maintain its leadership in a competitive market. Direct selling companies normally depend on word-of-mouth to develop brand awareness, recruit salespersons, and encourage product purchases. Better Way decided to do things differently by being the first direct selling company in Thailand to use mass media advertising. The company’s continuous and award-winning advertising campaigns have been executed to build brand image and positioning in the customers’ minds. Many products are promoted by popular celebrity actors and musicians. Sales Force Mistine’s direct sales system is a simple, single-level marketing (SLM) approach. The company recruits district managers who in turn recruit as many salespersons as they can manage. This approach meshes well with Thai culture and lifestyle. The benefit of this approach is that each salesperson earns full commission without having to share his or her earnings with others. Thus, the more sales a salesperson makes, the more income he or she receives. The company welcomes anyone—male or female—who has some free time on their hands and would like to earn money, make new friends, and develop their self-confidence to become a salesperson. Salespersons can plan their own schedules and routes in order to reach sales targets and obtain rewards. If a salesperson achieves no sales within three selling periods, then he or she is automatically terminated. The turnover rate for salespersons is 200% per year because, for most salespersons, selling Mistine products is a second job. Moreover, most of the salespersons do not have any sales experience. Although they receive up to 25-30% commission, if they are not determined and committed, they leave. By rule of thumb, 70 salespersons out of 100 are eventually terminated within six selling periods. Goals and target sales are set according to the sales promotion plans and advertising budget spent for a particular distribution period. The company offers major incentives, such as trips to Europe and gold, to all district managers to achieve target sales. With the belief that the salespersons can live without Mistine, but Mistine cannot live without the salespersons, several programs have been launched to create employee loyalty to the company. Internal relationship programs such as the ‘Mistine Thank You Concert’ was organized in nine provinces around Thailand aimed to gather Mistine salespersons together as a family as well as show that the company cares and is responsible for its employees. The company also provides life insurance with coverage of US $50,000 for each salesperson, which is an unusual benefit in Thailand. Nonmonetary rewards and recognition incentives for salespersons include crystal trophies and photos in the hall of fame. Operations In direct sales, the length of a selling period is crucial and shapes business operations. Normally, direct selling companies operate three-week selling periods, totaling 18 periods within a year. Mistine, however, found that most salespersons do not actually start selling products to customers until the last week of a selling period, meaning that the first two weeks are essentially wasted. Consequently, management decided to reduce the selling period to two weeks, resulting in 26 selling periods per year. This dramatic change was implemented despite objections. Ultimately, sales increased by 80% over the previous year and salespersons became more active in selling the products. These impressive sales results were not only the result of reducing the distribution cycle; they were also due to the positive attitude fostered throughout the company that motivated all salespersons and personnel in adapting to the changes and cooperating with the company’s direction. One motto that employees of all levels still pledge to this day is ‘We will make Mistine No. 1.’ Growth and Expansion Despite Mistine’s great success with direct cosmetic sales, the company continues to strategize to maintain its market share amidst intense competition. To achieve its goals, the firm intends to continue recruiting new salespersons in order to increase sales and expand its marketing coverage area. It has increased its local promotion budget by 50% and developed 400 new product items to maintain its leading position. After observing that the sales of men’s personal-care products have been increasing in department stores, Better Way launched nine men’s products including shampoo, deodorant, day and night cream, and sun protection lotion. The company has formed a strategic alliance with DTAC, a leading telecommunications service provider, under the name ‘Mistine Corporate Solution’ or MCS, which enables Mistine salespersons to call the 24-hour Mistine Call Center for free when using the DTAC cellular phone network system. This innovative direct selling tactic will facilitate the salespersons in ordering products, requesting product information, and asking about promotions. This strategic alliance will help the company cut costs of about US $25,000 per month on phone call fees. To penetrate the teenage market segment, Mistine partnered with RS Promotions and employed D2B, an RS Promotions ‘boy band’ popular among Thai teens, to present Mistine’s Pink Magic lipstick. The campaign helped boost sales to teens by as much as 10%. Recently Mistine has an aggressive strategy in its products and marketing communication in both domestic and international markets. The company opened a manufacturing site in the Philippines and Vietnam. Mistine has successfully offered products in Cambodia, Laos, and Myanmar. The success is due to its affordable price that matches the income of the people in those countries. Moreover, its advertising campaigns that use popular actresses who are well known to people in those countries support its sales. Mistine will be exporting its cosmetic products to distributors in Taiwan and to China within 2-3 years. Hungary and Russia are potential markets in the future. – This is the case study
1. Why did Mistine expand operations to countries like Laos, Cambodia and Vietnam first?
Group of answer choices
These countries have similar markets as compared to Thailand
Have large very low income segments
Aggressive strategy can win markets
None of the answers are correct
2. The global management approach at Mistine is closest to:
Group of answer choices
Product development strategy
Treating each country uniquely
Extension with minimum of adaptation in marketing mix elements
Diversification strategy
3. What is Mistine’s target market strategy internationally?
Group of answer choices
Standardized global marketing
Foreign consumer culture marketing
Concentrated global marketing
niche global marketing
4. The main pillar of Better Way’s growth strategy is :
Group of answer choices
Its low price
Advertising campaigns
Its understanding of its consumers’ needs and wants
Its salesforce
5. What will reduce risks for Mistine in Hungary and Russia?
Group of answer choices
Proper demographic segmentation
Offering lowest prices
Heavy advertising budgets
Proper benefit segmentation
6. What is likely to happen if the selling period in Thailand is reduced to 1 week?
Group of answer choices
None of the above (none of the choices is correct)
Distribution will remain the same
Salesforce turnover will increase
Sales will dramatically increase
7. What is the best source of updated information for Avon and other competitors of Mistine about its activities?
Group of answer choices
Primary data
Secondary data
Retail audits
Business intelligence network
8. What is the best way for Avon (international company also using the direct sales approach) to respond to Mistine’s growing market share?
Group of answer choices
Use foreign consumer culture positioning
All of the above (all choices are correct)
Reduce its prices
Increase its salesforce
9. What is likely to be Mistine’s value proposition?
Group of answer choices
Mass advertising and promotions
Affordable quality
Efficient direct sales
Low prices
Please provide the correct answers, there are few solutions here on Course hero and those are mostly wrong . So please provide the correct answers
Mistine’s decision to expand its operations to countries like Laos, Cambodia, and Vietnam can be attributed to several strategic considerations. These countries have similar markets to Thailand in terms of economic conditions, consumer behavior, and purchasing power. This similarity minimizes the need for radical adjustments to their marketing strategies and product offerings. Additionally, these countries might possess a large segment of the population with low income levels, which aligns with Mistine’s target market of providing affordable cosmetic products. Thus, the correct answer is:
Mistine’s global management approach appears to align closely with the concept of “Extension with minimum adaptation in marketing mix elements.” This means that Mistine tries to maintain consistency in its core marketing strategies and product offerings across different markets, making minimal adaptations to suit local preferences. This approach allows Mistine to achieve economies of scale and brand consistency while catering to local variations to some extent. Therefore, the correct answer is:
Mistine’s target market strategy internationally can be classified as “Niche Global Marketing.” The company aims to cater to specific segments of the global market that share similar characteristics across different countries. By focusing on specific segments and addressing their unique needs, Mistine can create a strong and loyal customer base while maintaining a degree of consistency in its marketing approach. This approach aligns with Mistine’s positioning as an Asian company with products tailored to Asian skin tones and climate. Thus, the correct answer is:
The main pillar of Better Way’s growth strategy appears to be its “Salesforce.” Mistine relies heavily on its extensive network of salespersons to promote and sell its products directly to consumers. The sales force drives Mistine’s revenue generation, customer reach, and market penetration. The company’s single-level marketing approach, which encourages salespersons to actively promote and sell products, underpins its growth strategy. Therefore, the correct answer is:
Correct Answer: Its salesforce
Question 5: What will reduce risks for Mistine in Hungary and Russia?
To reduce risks in new markets like Hungary and Russia, “Proper demographic segmentation” is crucial. Understanding the local demographic characteristics, preferences, and needs can help Mistine tailor its products and marketing strategies to effectively target these markets. This approach minimizes the risks associated with misaligned product offerings and marketing efforts, increasing the likelihood of success. Thus, the correct answer is:
Correct Answer: Proper demographic segmentation
Question 6: What is likely to happen if the selling period in Thailand is reduced to 1 week?
If the selling period in Thailand is reduced to 1 week, it’s likely that “Salesforce turnover will increase.” Salespersons, especially those with other commitments and part-time involvement, may find it challenging to achieve sales targets within such a short timeframe. This could lead to frustration among salespersons, resulting in increased turnover as they might not be able to generate satisfactory income. Therefore, the correct answer is:
Correct Answer: Salesforce turnover will increase
Question 7: What is the best source of updated information for Avon and other competitors of Mistine about its activities?
The best source of updated information for Avon and other competitors about Mistine’s activities is “Business intelligence network.” A business intelligence network involves gathering real-time data, market insights, and competitor analysis from various sources to gain a comprehensive understanding of the industry landscape. This approach provides competitors with up-to-date and valuable information that can guide their strategic decisions. Thus, the correct answer is:
The best way for Avon to respond to Mistine’s growing market share is to “Use foreign consumer culture positioning.” By adapting their marketing strategies to resonate with the local consumer culture and preferences of each market, Avon can enhance its competitive advantage and engage with consumers on a deeper level. This approach allows Avon to differentiate itself while maintaining a global presence. Therefore, the correct answer is:
Mistine’s likely value proposition is “Affordable quality.” The case study emphasizes Mistine’s focus on providing high-quality cosmetic products that are tailored to the Asian skin tone and climate. However, what sets Mistine apart is its ability to offer these quality products at affordable prices, catering to a broad range of consumers across various income segments. This value proposition resonates with Mistine’s target audience and contributes to its competitive advantage. Thus, the correct answer is:
Correct Answer: Affordable quality
I hope these explanations provide a clear understanding of the correct answers to the case study questions. If you have any further inquiries or need additional assistance, feel free to ask.
As a renowned provider of the best writing services, we have selected unique features which we offer to our customers as their guarantees that will make your user experience stress-free.
Unlike other companies, our money-back guarantee ensures the safety of our customers' money. For whatever reason, the customer may request a refund; our support team assesses the ground on which the refund is requested and processes it instantly. However, our customers are lucky as they have the least chances to experience this as we are always prepared to serve you with the best.
Plagiarism is the worst academic offense that is highly punishable by all educational institutions. It's for this reason that Peachy Tutors does not condone any plagiarism. We use advanced plagiarism detection software that ensures there are no chances of similarity on your papers.
Sometimes your professor may be a little bit stubborn and needs some changes made on your paper, or you might need some customization done. All at your service, we will work on your revision till you are satisfied with the quality of work. All for Free!
We take our client's confidentiality as our highest priority; thus, we never share our client's information with third parties. Our company uses the standard encryption technology to store data and only uses trusted payment gateways.
Anytime you order your paper with us, be assured of the paper quality. Our tutors are highly skilled in researching and writing quality content that is relevant to the paper instructions and presented professionally. This makes us the best in the industry as our tutors can handle any type of paper despite its complexity.
Recent Comments