Mary Kay's Rhonda Shasteen Works on a Brand Makeover

Mary Kay Ash, founder of the Mary Kay cosmetics company, died in 2001. But her office north of Dallas remains the way she left it. It has pink walls and a pink circular couch. The restroom, unused for almost nine years, has pink toilet paper. You can still find a pair of her shoes in a desk drawer.

It's all charming — even moving. But an outsider who never met the legendary businesswoman can't help but wonder: Is the company, like the office, stuck in 2001?

This is a question CMO Rhonda Shasteen grapples with every day.

“Most women have an awareness of Mary Kay, but often their picture is one from the past,” she says. “In the last three years my work has been focused on showing them we're very relevant.”

For one thing, the company returned to television advertising two years ago for the first time since 1982. And it's making a push in markets like China, Russia, Korea and Brazil.

At the same time it has reached out to younger women. That means “rebirthing” the brand and creating a robust online experience both for customers and more than 2 million beauty consultants around the world, including 600,000 in the United States.

It seems to be paying off. The firm known for gifting pink Cadillacs to top sales reps is forecasting double-digit growth for 2009 and has a goal of $5 billion in sales by the company's 50th anniversary in 2013.

But it's not easy, as Shasteen admits. “It's a challenge being a mature brand in a mature category,” she says.

Just as fashion people do, cosmetics marketers spend a lot of time talking to themselves, notes Robert Passikoff, founder and president of consultancy Brand Keys Inc. “They have a real fix on value and image, but they tend to look through a category lens rather than a consumer lens.”

Mary Kay seems to have a better view than others. It tied for first place in the mass merchandiser/cosmetics category with Maybelline in Brand Keys' 2008 Customer Loyalty Engagement Index.

Still, it's not easy standing out in a crowded market — especially when you have no drugstore presence.

“You need to maintain differentiation — if you don't, you become a category placeholder,” Passikoff adds.

Globally, Mary Kay's biggest competitor in skin care is Olay. In cosmetics, it varies with the region — Maybelline and Cover Girl are its closest rivals in the United States.

No matter what the region, the firm provides cosmetics at reasonable prices, Shasteen says. The most popular products in this country include the TimeWise skin-care line and a new refillable eco-friendly compact. “Not only has that been a good tool to bring in more customers but also a tremendous tool to help recraft our brand,” she notes. “I think the role of product often is undervalued when it comes to reshaping a brand's image.”

But new products aren't enough. To give it a competitive edge, last fall Mary Kay added a virtual makeover function to its Web portal. “We wanted to give women a value-added experience when they come to MaryKay.com,” Shasteen says. Users who upload their photos for makeovers can send the before-and-after pictures to friends for advice.

The difficulty online is that the company has two distinct audiences to communicate with: customers and independent sales consultants.

“I definitely have a dual sales platform,” Shasteen admits. But other marketers might find it challenging. The company can't sell directly to end users. Consultants get credit for every sale.

Top priority this year? Creating an online social network for the sales force, Shasteen says. When that's done, the company will focus on building one for its customers.

E-mail already is a major brand builder. The company facilitates campaigns to customers on behalf of the beauty consultants.

In addition, consultants can create their own Web sites. They pay a $50 annual license fee, and in return can develop e-commerce and online lead-generation capabilities. Visitors to MaryKay.com who don't have a local consultant can provide their locale and be directed to the page of someone in their area — this person becomes their link to the company.

WHAT WOMEN WANT

At one time, most women probably were introduced to the cosmetics company through house parties. That still happens, but a lot of the face-to-face selling now takes place in a work environment — during lunch hours or at special events. Directors also hold weekly sales meetings with consultants to introduce new products and offer makeovers to test them.

Shasteen notes that the consultants are protective of the brand. Her team once spent six months perfecting a promotional video — and the consultants hated it. It was one of her worst days on the job.