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American Morning
Mary Kay Cosmetics Providing Opportunities for Russian Women
Aired August 20, 2001 - 10:33 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Right now, it's time to talk beauty.
And when you say Mary Kay, the first thing that pops into the minds of a lot of people is makeup. Mary Kay Ash founded the cosmetics line in 1963 in Dallas, Texas. Besides its focus on women, the company was one of the first to introduce a complete skin care line exclusively for men.
Retail sales regularly top $1 billion. From its humble beginnings, Mary Kay is now sold worldwide in 35 markets, including Russia. And for some Russian women, Mary Kay is making an incredible difference in their lives and incomes.
Our Moscow bureau chief Jill Dougherty has that story.
(BEGIN VIDEOTAPE)
JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF (voice-over): Two days a week, Olga Bogdanova sets out on a sales call. As usual, it's right in her own neighborhood in the city of Korolyov, about an hour north of Moscow.
She's brought along face creams and cleansers and Tatiana's (ph) favorite perfume: Journey by Mary Kay Cosmetics, the U.S.-based direct-sales company.
Olga started selling Mary Kay Cosmetics in 1996. She bought her first supply for $70. And soon she was making $500 or more a month, five times the average monthly salary, which she reinvested in her business. Russia's financial crisis of 1998 was a wake-up call.
OLGA BOGDANOVA, MARY KAY CONSULTANT (through translator): I know if the need arises, I can earn as much as I want. And that financial independence gives me a feeling of freedom in facing the future.
DOUGHERTY (on camera): All across Russia, in hundreds of cities, towns and villages, 30,000 women are working as Mary Kay beauty consultants, all of them learning the basics of business from the ground up.
(voice-over): This is Russia's top Mary Kay representative: Irina Lebedeva. Ten years ago, she was a chemical researcher.
IRINA LEBEDEVA, MARY KAY CONSULTANT (through translator): Of course, back then, perestroika was a very positive event for our country. But for individual Russians, it was tough. The government couldn't support the research anymore. I didn't know what to do.
DOUGHERTY: In her first four months selling Mary Kay cosmetics, Irina racked up $30,000 in sales.
LEBEDEVA (through translator): I see enormous possibilities for women here in Russia. I don't know of any other work that's better. It gives you a flexible schedule. There's no boss. You're independent.
DOUGHERTY: And in Russia's sometimes unpredictable economy, having a second career is crucial. Just ask Mary Kay's executive director in Russia.
TAMARA SHOKAREVEA, MARY KAY CONSULTANT: Actually, in my previous -- you know that I was a research worker with -- yes, I worked for the Russian Academy of Sciences. Yes, I am a Ph.D.
DOUGHERTY: By the way, Irina did receive Mary Kay's traditional award for top saleswomen. But it's not a pink Cadillac. Here in Russia, it's a BMW.
Jill Dougherty, CNN, Moscow.
(END VIDEOTAPE)
KAGAN: For more now on Mary Kay's marketing in Russia, we are joined by Kathleen Garrett. She is the international marketing vice president for Mary Kay Cosmetics. And she is joining us this morning from Dallas, Texas.
Kathleen, good morning.
KATHLEEN GARRETT, INTL. MARKETING V.P., MARY KAY COSMETICS: Good morning.
KAGAN: We've got to start with the pink Cadillac. Why no pink Cadillac in Russia? And why is the Beemer silver?
GARRETT: Well, a silver Beemer is something that, within that culture, is very attractive. Pink would be a very distracting color on the streets of Moscow, if you can imagine. And we really want to have something there that is enticing to that sales force.
KAGAN: It certainly would attract some attention. It's surprising to see how well this is doing in Russia, because you don't hear about Russian women having a lot of disposable income for things like cosmetics.
GARRETT: No, you don't. But what is interesting is that cosmetics is an indulgence, but find something that they do find worth paying for. Over the last 50 years, these women have survived untold political and economic chaos, but their femininity has remained intact. And it's very important to them to look beautiful. So it's the perfect place for Mary Kay Cosmetics. KAGAN: Are what do you find are the hot products? Are they different in Russia than here in the U.S.?
GARRETT: Not so much different. A lot of our products are very similar. Being a skin care company, that works fabulous in Russia. You have very harsh weather, a difficult climate. The winters there are very long. So taking good care of your skin is a priority. And that is certainly what we find is our top product.
KAGAN: What about the economic opportunity for the women, especially the ones that we saw featured in the piece that Jill Dougherty has put together?
Entrepreneurs and Russia: again two things that you don't necessarily put together.
GARRETT: You don't. But we have found them to be very entrepreneurial. These women are very strong. They are very courageous. And what was missing for them throughout the communist era was really opportunity.
And what Mary Kay offers is an opportunity to have flexibility, to change your life. I think a story that perfectly illustrates that is, one of our top saleswomen, within the first few years of her business, was earning over six figures a year.
KAGAN: Really? And that money goes a far way in Russia.
GARRETT: It's incredible.
KAGAN: Did you find, though, that with any of your products or the way your system works, you had to adapt to certain things in the Russian culture that you were not familiar with when you first went into that market?
GARRETT: Not so much. We had a really good local team there that was familiar with the Russian culture. I think the biggest challenge was just growth. We launched that business, and women were clamoring. We couldn't get the cosmetics there fast enough.
KAGAN: Really? That's your biggest challenge.
Well, Kathleen Garrett, with Mary Kay, thank you very much for joining us. And congratulations on your success in Russia.
GARRETT: Thank you.
KAGAN: Thanks for being with us.
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