Marketing and Foreign Markets Avon

Avon, started its journey in the early 1886 is now the oldest and the largest marketers and manufactures of the beauty products. The advertisements from “Ding dong, Avon Calling” to “Hello Tomorrow” and from “You never looked so good” to the latest one “The Company For Women”, always helped Avon to improve its image and enhance the marketing strategies to serve the purpose. One of the amazing facts about Avon includes that it’s headquarter is situated in USA but major portion of its sales comes from outside North America. Avon has captured a huge market all over the world and its distributing the beauty solutions to almost all parts of the world. With Avon being a part of 112 countries, the company has approximately 6 million independent sales representatives. These representatives go door-to-door for selling these products. Fig 1 shows Avon business worldwide.

Fig1. Avon Business Distribution Worldwide

Amongst some of the important question regarding Avon, one must have this one triggering question in mind. Why is Avon so much more dependent on its foreign operations than on its home (U.S.) operations? The answer to this question isn’t that difficult either. Avon could forecast that the USA market was saturated for fragrances, cosmetics and toiletries. Avon knew that starting; here would mean a real tough competition. Avon decided that the market outside USA would be easy to rule, and then they can come back home to convince and gain customers. According to their yearly report regarding US market they said, “growth to be in line with that of the overall beauty market” (“Avon Products Inc.,” 2010). USA has less than 5% of the world population, so focusing on the untouched USA market would have been difficult. Next the Avon selling system with regards to the distribution schemes has to be kept within focus.

Avon has a door-to-door sales system, with female representatives selling products door-to-door as a part time job. The direct sales programs help Avon in many ways, including lower advertising cost, fewer numbers of employees and most importantly no shelves storing spaces required in stores. These low budgeting schemes enable Avon to keep their prices lower than their competitors. The door-to-door sales also help in influencing clients more and more. The US sales dropped when the women generation of US entered businesses full time. Due to the fall in sales the Avon representatives are now opening kiosks in different shopping malls. This increased the sales through family, friends and now the colleagues from work.

Through the years from 1996 to 2008 the number of sales representatives increased from 8 to15 million, also increasing the sales. When the recession hit US the foreign markets were in better condition for work. The rural population of countries like Brazil and Philippines are keener to shop from home instead of buying from shopping malls. The number of representatives in Brazil only is 8 Million. Avon focused on the middle class in the countries like Malaysia and Chile. The International Strategy for Global Products helps Avon determine which products will have more sales in which countries. The R&D departments are all located within that vicinity to be further lower the price for products such as sunscreen, moisturizers and insect repellents in the Brazil, in Asia the skin lightening creams have a higher demand, and in Mediterranean countries the fragrances are widely used. Japan has a huge market for technology driven skin care products. Argentina demands the wellness and health products where as Spain has a huge sale for personal care products.

The product might be developed in any country, but then it is distributed worldwide to increase the sales. This distribution has given a rise to the consumer market of Avon throughout the world. However, this scheme has also increased the production cost, lowering the profit margins. The marketing strategy includes catalogue distribution within US and worldwide. With the increase of its product line in thousands the reps had less info about all the products. Thus Avon cut down on its product line by 25% and plans to alter it more. Avon is also planning to manufacture products at only a few selected locations to cut down the cost. Avon also signed pacts with different universities focusing on the regional markets. Products like Anew, be Coming, Rare Gold, and the Far Away fragrances are all markets oriented. Through standardized marketing and manufacturing all helps in reducing costs of packaging. Avon also uses the country languages on their products to attract more consumers. The pricing is done

Individually by all the countries, keeping in mind the local market. This also enhances the shipments of products from one to another country with the lower cost of the same product. Keeping the market in mind the sales campaigns are short programmed, keeping inflation in mind. Avon also hires stars like Salma Hayek, Jennifer Hudson, Derek Jeter (for men products) are all been a part of Avon. Avon also celebrates Mother’s day, Women Day and many more women functions to attract more and more women. It also runs breast cancer and violence campaigns to raise funds for the social issues. An Avon sales representative mostly visits the same consumers to take the orders again. When China banned the door-to-door sales in 1998 Avon opened thousands of beauty salons to cater for the needs. Avon also distributes information about different countries to increase their sales. There are a few disadvantages for the direct door-to-door sales. A product in the catalogue might not always be present with the rep and a customer can not access the rep any time he desires to.

Reference:

Websites:
1. Avon case study. (2009, May 15). Retrieved from
http://www.docshare.com/doc/13808/Avon-Case-Study

2. AVON Products. (n.d.). Retrieved September 25, 2010, from www.dsef.org/press/pdfs/avon_products.pdf

3. AVON PRODUCTS INC . (2010, February 25). Retrieved September 25, 2010, from http://biz.yahoo.com/e/100225/avp10-k.html

Book:
4. Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2009). INTERNATIONAL BUSINESS-Environments and Operations (12thth ed., pp. 648-672). New York: Pearson Education International. Retrieved September 25, 2010, from www.gbv.de/dms/zbw/55573465X.pdf