AVON Case Study
Avon was founded in 1886 and has developed to become one of the oldest and largest producer and marketer of beauty-related products throughout the world. As part of enhancing its productivity and success, Avon has recently switched its marketing strategy to transform its image and enhance its marketing approaches. The company has combined national responsiveness with globally standardized marketing initiatives to push into foreign markets and increase its global operations. The firm focuses on standardized products with global brand and conveys its successful practices and organizational learning from one country to the next.
Marketing orientation can be defined as a strategy that is utilized by a business or company to enhance its position in order to meet the needs of its customers. There are various marketing management orientations with varying mechanisms for creating, producing, and marketing products i.e. strategic marketing, selling, production, social marketing, and product orientations (Roberts, n.d.). The production marketing orientation is the only one that does not apply to Avon since the firm focuses on a sales orientation rather than product adaptation in its global operations. The applicability of product orientation is evident in the Avon's modification of its products to meet certain needs of customers. The strategic marketing orientation is evident in Avon's modification of its distribution technique, especially in China. In contrast,...
The selling orientation is characterized by the use of direct sales representatives in Avon's marketing approaches.
Dependence on Foreign Operations
Avon has become increasingly dependent on its foreign operations rather than its domestic or U.S. operations to an extent that it has its own sales operations in more than 65 countries across the globe. The increased dependence on foreign operations is largely influenced by the company's efforts to create a global image that portrays it as a firm that supports women and their needs. Moreover, the outlook in foreign markets is brighter than the United States outlook, which is gloomy. This implies that the company has focused on foreign markets because these markets have higher potential for increased productivity and success as compared to the United States market. The other reason for this dependence is that the domestic market i.e. U.S. market is fully exploited and has no untapped market for its products due to the presence of several competitors and intense rivalry.
Socioeconomic and Demographic Changes
Similar to other companies operating globally, Avon is vulnerable to some socioeconomic and demographic changes that could affect its operations. These changes include increase in the number of employed women, preference to buy expensive products from Avon's competitors, and economic growth of various countries. The economic growth of various countries would have positive impacts on Avon's operations since it will make its products more appealing to customers with more disposable income who would have otherwise considered the products as secondary needs. The other two changes would impact it negatively since increase in the number of employed women will affect the ability of women to schedule appointments for the direct sales. As more women are employed, they are likely to opt for expensive products from Avon's competitors as part of creating perceptions of a higher social status.
Impact of a Global Recession on Avon's…
This strategy of investing face-time has continued to scale extremely well in the U.S., yet has faced many challenges in other nations that value data, hard numbers and strong methodologies to validate the claims of products. One nations' buyers of cosmetics in particular, the Japanese, are more focused on the specifics of the how a product is produced and want to know in great detail what the ingredients are
AVON Calls on Foreign Markets Avon believed that having regionalized new product development centers, supply chain operations, marketing and sales divisions would make them more competitive in foreign markets. Ironically the exact opposite happened, as the case illustrates. Avon's performance was drastically reduced and the duplication of effort crippled the organization. Unfortunately the highly decentralized, market-driven organizational structure that Avon had such high expectations for failure to deliver the results needed
The company's founders and senior managers however feared this would make the company less agile and able to respond to market requirements (Grammenou, 2009). Demographic Analysis There have been many socioeconomic and demographic changes that have affected Avon's business model in the last two decades. The greatest socioeconomic force affecting them today is the need for many women to work full-time jobs to contribute to their household's income. This has drastically
Avon has both word-of-mouth and trust on its side as a provider of cosmetics, beauty and health aids. Their distribution strategy is one of the aspects that make their unique value proposition all the more effective as well, as it reinforces trust with face-time between their representatives and customers. The Avon model and competitive strength is all predicated on buying from someone you know and trust. Supply Chain Implications for
In this regard, Lin and Lin add that, "The Chinese personal computer manufacturer wanted to increase its share in Western markets. The acquisition hoisted the manufacturer from 9th place to 3rd place in terms of PCs sold. These acquisitions illustrate China's desire to spend low-cost money to acquire existing brands and distribution access, as well as securing additional outlets for other Chinese produced goods" (2008, p. 32). Planning and control. Although
Avon Calls Foreign Markets." Question: Why Avon dependent foreign operations home (U.S.) operations? Please provide a couple reasons relate case. Avon Calls on Foreign Markets Avon is one of the oldest and largest cosmetics manufacturing and retailing organization. The company has penetrated the industry through a specific model of direct sales through Avon consultants and representatives. The Avon products are as such not available in traditional stores and can only be