AVON -- Foreign Markets
The marketing strategies that the reading assignment offers include Avon's style of selling -- which is direct sales door-to-door -- and the women who sell door-to-door actually go back to the home where they sold and deliver the products. Another strategy is to sell using the Internet (personal web pages), and selling to friends, colleagues and family (Chapter 16, p. 622). Also, using universities in China, Japan, Australia and Thailand to be part of the development of new products is highly relevant to Avon's global initiatives. Keeping original product names is a wise move for Avon; though they bought Justine in South Africa, they kept "Justine" as the brand (623). Running short campaigns is also smart marketing, because prices can be quickly adjusted based on how inflation is eating into consumers' pocketbooks (623). Using billboards and media advertising is what many companies do, is a wise move in foreign markets. Even going to the lengths of sponsoring global summits, showing they really care about the lives of women worldwide by aiding in the fight to defeat breast cancer and domestic violence is brilliant (624).
Question Two: Avon is dependent on foreign markets because, according to Chapter 16, the potential for growth in the United States was not seen as viable. Why? Because the competition with other beauty-related companies was considered unwise; the Chapter 16 narrative says that Avon preferred to go overseas because there was far less competition there and yet huge...
While door-to-door operations are still viable, especially in foreign markets, those door-to-door Avon ladies are competing against "a growing online channel" of Internet-related companies, Shayon writes. Working women are often not at home to receive a personal call from an Avon lady, so these women in this socioeconomic group find it convenient to buy products online from Beauty.com, Drugstore.com (Walgreen's companies), and Sephora.com (Shayon). The demographics show that women over 65 still prefer Avon products, and they relate to the person-to-person sales strategies of Avon. But millions of younger women prefer to buy online. As Forbes' journalist Richard Levick writes, Avon's "…delivery system is outmoded" (Levick, 2012). "If Avon is to join the 21st century, it's got a big task on its hands," Levick writes.
Question Four: A global recession (like the one that began in 2008) can be disastrous for Avon. Recently Avon's earnings "…plunged 70%" because of exchange rates on its foreign investments and because in 2012 the world was just beginning to pull out of the recession (Forbes YCharts, 2012). Also, "…fewer women bought its makeup from its army of discontented door-to-door saleswomen" (Forbes, 2012). Also, Avon has been involved in a bribery scandal overseas, and that has hurt its reputation (Forbes, 2012).
Question Five: There is a serious question today as to whether or not Avon really has competitive advantages. All the recent journalism research shows that Avon is not in a situation…
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
AVON Case Study Overview of Avon Situation Leading Avon towards Change Model for Change Theory in Avon Types of Evaluation Information and Benefits to the Avon Success of Change in Next Five Years Avon is found to experience different issues causing changes in its brand and product lines. It reflected the positive net sales and earnings growth for past five years in single, which were observed to be declining every year afterwards. There are specific challenging
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
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
As a result of the implementation of this pricing strategy, whenever a modification is incurred in the price of the commodities used in the process, this modification is reflected in the products' retail prices. In other words, when the costs of manufacturing and distributing the AVON cosmetics increase, the retail price of the products will also increase. Vice versa, as the costs decrease, the retail price would decrease. The second