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Wednesday, Jun 7, 2023

Beauty Direct

In July, Connie Tang was brought to Jafra Cosmetics International to take over as president from Frank Mineo who had been with the company just a year. The company, based in Westlake Village is one of the largest direct sales companies in the world. It is a division of Vorwerk & Co. KG Holding, a German-based, international direct sales supplier of home products, since 2004. Tang spoke with the Business Journal by phone from New York City where she was in the midst of a two-week tour of the United States. Question: A year ago we interviewed Frank Mineo who had just been named president of Jafra Cosmetics. What happened to Frank? Answer: There was an underlying difference of opinion on the overall strategic direction of the corporation. A lot of it lay in the areas of internationalization of the company and the objectives for short-term growth. It was agreed that both parties from a corporate point of view had a difference of opinion so Frank decided not to continue. He left at the beginning of July. Q. What were the issues about internationalization? A: Our parent company (Vorwerk) is very interested in internationalization as an ongoing strategic growth objective. There was just a difference of opinion about timing where to go and all the specific details. The corporation still has aggressive plans to open up global markets. We just reopened the Brazil market at the end of September. Brazil for Jafra has been an on-and-off kind of international market. The company was there 32 years ago as Jafra the corporation and then left the marketplace and then reentered again through a distributorship organization almost like an importer-type relationship. This (re-entry) has been in planning for a year-and-a-half. We’ve recommitted ourselves to this market because it’s an incredible opportunity. The Brazil beauty market is strong for direct sales and we have maintained a base of loyal consumers and consultants over the years. We launched in Russia over a year ago and have plans to blow that market open strategically. We will have our first launch in Asia Pacific in 2009; but I’m not at liberty to say which country. In the next five years we plan to open more in the areas of emerging markets: Asia Pacific, specifically southeast Asia and Latin America. We have a tremendous amount of strength in the Latin American world. Our reputation and credibility stems from our place in the US-Hispanic arena, and our Mexico business. There is a lot of opportunity to leverage that brand awareness, and that credibility for the company. In the Latin markets (Jafra) is a viable business opportunity for women where business opportunities are not generally open to them. Q: How do you deal with different cultures? A: We really do understand that it is not one size fits all. We are fortunate to have incredible products but they are tailored to the consumers’ marketplace and what the particular culture is receptive to. Q: What else is changing in the company? A: Jafra is a direct sales company that has a long history it’s a 52-year-old company. In my role now, I’m looking at where the company should be going as far as direct sales. It’s an opportune time to re-establish and reaffirm who we are in the marketplace as a beauty brand as well as a direct selling company. We have the business model of a direct sales company. The essence of what makes this company grow is we offer people an opportunity to earn additional income, and have Jafra in their life as an income opportunity as well as a career opportunity. From the perspective of being a beauty brand competing with mass market and retail from that perspective we really are looking at initiatives and plans and strategies to revitalize our brand and bring it up to date. To be honest, there is room for improvement in our image. We have tried and true products and customers to go along with it but is it the most contemporary in the market today? We’re going to work on that. That will help us in our objective to reach newer, younger generations. We’ve got to really be looking at setting the stage and laying the foundation for the future growth of the company. Q: How are you going to do that? A: We’re taking a twofold, dual-pronged approach. It’s difficult to be relevant in the beauty world and attract people to our business if our products don’t match our image. We want to see that our portfolio is balanced appropriately between skin care, body care and color. We’re also going to work on developing the image of the products, everything from packaging, design, artwork. That will work hand-in-hand with our public relations initiatives. It’s great to do all this work internally but it doesn’t serve us very well if nobody knows about it. It’s great to say ‘I want to attract a younger audience, especially with the economy the way it is, we want to give more people opportunities to earn additional income but it has to be relevant; it has to speak to that young person. Q: Who develops the products? A: From a product development standpoint, we have our own research and development institute in Westlake Village (where Jafra’s headquarters are located). All of our chemists and research experts and quality labs are based in the Westlake office. That gives us the opportunity to centralize all of our development with the understanding that in some markets we may need to tweak formulas. Q: Where are the products manufactured? A: We have a wholly-owned manufacturing plant in Mexico. The facilities are there, however it’s managed and directed by the R & D; team in Westlake. So that affords us the ability to maintain competitive pricing. Q: Tell me why you’re traveling all over the country? A: These are called ‘the power of possibility’ meetings. They’re really to do a couple of things. One is to reconnect and make sure we’re staying connected with our sales forces. This is a people business; it’s all about motivating our teams, keeping them engaged. But we’re also spreading the word about what are the possibilities like earning extra money or trips; participating in a compensation plan that affords you a car. It really is a grassroots kind of campaign to reach people. It’s a really strong initiative for us, even though we are a 52-year-old company. There’s so much room for growth. Lots of people never heard of us. I grew up in New York and worked for Lancome and I had never heard of Jafra. Q: Will you be doing an advertising campaign? A: Traditionally direct sales companies have not put funds into advertising. Brand recognition comes from word of mouth, grass roots. Most direct sales companies choose to invest the money in their sales force that’s what keeps people engaged in the business. There’s no saturation. It’s not like everybody’s been approached by a Jafra person. Q: It’s a tough economy now. How do you deal with that? A: During times of economic downturn, direct sales companies normally perform well and cosmetics very well. Some of these personal care items in the beauty arena are a necessity, not a luxury, and others are an affordable luxury. You can’t afford a new TV or a night on the town but the emotional impact and psychological impact of a new lipstick and how you look does help with your state of being in times of stress and times of uncertainty. That is something we encounter even more so because we’re so in touch with the end user, with our consultants that are out there. That’s the difference from retail: we have a closer relationship with our sales consultants. Q: What is the breakdown of your sales force? A: It’s 99.99 percent women. There are very few men. The men who have invested in the business are primarily in the Hispanic arena but it’s really a woman-based business. From a product perspective we do have products for men, for babies, we try to cover products for the whole family, but it really is a woman-based business.

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