AVON Case Study Avon Inc., a 115-Year-Old

AVON Case Study Avon Inc., a 115-year-old company, which manufactures and markets beauty and beauty related products, is known to have built its success globally through direct sales. In fact, Avon's strength has always been the "Avon lady," a nation wide force of women sales representatives trained in the art of customer relationship building. Recently, however, Avon's sales have seen a dramatic drop that has largely been attributed to the company's failure to keep pace with the Internet revolution.

Indeed, the realization that the World Wide Web has redefined direct selling has led the company into formulating plans to harness the power of the Internet to improve its sales, customer relationships, and operational efficiencies. It is widely recognized that the Internet has the power to substantially increase a company's market reach and supply chain efficiencies.

In fact, in a day and age when online services and shopping are proving a boon to working women, it appears that Avon's continued dependence on its traditional door-to-door sales business model is a mistake. As such, the facts indicate that the company has missed the Internet revolution and is now attempting to catch-up. Indeed, this is evident in its plans to bring in the Internet as a support sales channel, and develop a worldwide intranet and extranet.

The challenge that Avon faces, though, is to develop an Internet strategy that does not undermine the strength of the "Avon lady" as the ultimate channel for personalized customer attention and relationship building. Avon's need is to ensure that it maintains the support of its 3 million strong sales force globally, while motivating them into harnessing the potential of the Internet to drive sales and customer relationships. This means that Avon's Internet strategy must work in tandem with the efforts of its sales representatives.

Therefore, Avon's offer to assist sales representatives in creating their own Web sites to showcase Avon's offerings and generate sales makes imminent sense. Further, Avon's own Web site will surely serve as a channel that working women can access either from the office or home, thereby ensuring that Avon does not miss out on an important target segment. Finally, Avon's plans for a worldwide extranet and intranet, if implemented well, will definitely improve the company's communication, training, service, supply and cost efficiencies.

In addition to Avon's plans for technology, creation of new channels such as 40 retail stores and more catalogue offerings in the U.S., the company can also expand its product and service offerings to fulfill the evolving needs of modern women. For example, Avon can introduce products that address the growing health and fitness concerns of women. Similarly, Avon can also generate incremental sales through introducing products and services, which are more aligned to the needs and imagery of different age segments.

Besides the U.S., Avon can well replicate its new business model in other markets to increase its worldwide sales, especially if the model is tested and proven in select markets. In fact, Avon's own Web site can help build a global brand through serving as an effective communication and interactive channel.