Andrea Jung's Makeover of Avon Product Inc.

Topics: Marketing, Sales, Business process Pages: 21 (6653 words) Published: July 5, 2008
1.0The History of Avon
Avon Products, Inc. is a US cosmetics, perfume and toy seller with markets in over 135 countries across the world. The company was founded in 1886 by then 28-year-old David H. McConnell who sold books door-to-door and gave out perfume to entice women to buy his books. His perfume became so popular that eventually that is all the women wanted. He then founded the California Perfume Company (CPC) in New York. As the company grew, he hired his first representative, Mrs. P.F.E. Albee. In 1897, McConnell built a small laboratory in Suffern, New York. In 1906, the West Coast office in San Francisco was destroyed in the Great Earthquake. In 1914 the first non-US office was opened in the Canadian province of Quebec. The California Perfume Company was incorporated on January 28, 1916 by David H. McConnell and Alexander D. Henderson (businessman) in Suffern, New York. [2]. By 1918, five million units were sold in North America, and by 1928, sales reached $2 million. In October, 1939, the name was changed to Avon Products, Inc. The company was taken public in 1946. By 1954, sales reached $55 million, and the "Avon Calling" advertising campaign introduced. By 1971 the lab would grow into the Avon Suffern Research and Development facility. By 1979, sales reached $3 billion, with one million direct sales agents. Today sales exceed $8 billion worldwide. In 2005 they opened a $100 million dollar 225,000 square foot R&D facility to house its over 300 research and development scientists on the original site in Suffern, New York. Avon also has offices in Luzerne, Pennsylvania and Davenport, Iowa. Their vision is to be the company that best understands and satisfies the product, service and self-fulfillment needs of women globally and dedication to support women touches not only beauty but health, fitness, self-empowerment and financial independence. Traditionally a direct marketing company, Avon's fastest growing markets today are in China and Russia. The company's chairman and CEO is Andrea Jung, who was promoted to the position in 1999. Avon uses both door-to-door sales people ("Avon ladies," primarily) and catalogs to advertise its products. In some markets (most notably China, which had banned all door-to-door selling before mid-December 2006) Avon products are sold primarily in retail stores. Avon's product lines include lipsticks, foundations, bath and skin lotions, anti-aging cream, perfumes, as well as jewelry and clothing. Although the company has always been more directed towards female customers, Avon's line of male products continues to expand, and its children's products such as shampoos and toys have also proved successful. Two brand diversifications "mark." (Targeted to younger, college-aged women) and "M" (an Avon catalogue for men), have helped the company reach out into markets it has not serviced. Mark proved to be successful in reaching a new generation of recruits, primarily young women ages 18-25, with a monthly "magalog" featuring award-winning products. In addition to its corporate pursuits, the Avon Corporation is involved in philanthropic causes, primarily centered on domestic violence, women's empowerment and health issues such as breast cancer. Key rivals of Avon and their position

2000 Corporate Revenues2000 Personal Care Sales
1L’Oreal$10.6 billion$10.3 billion
2Procter & Gamble$40.1 billion$7.3 billion
3Estée Lauder$4.4 billion$4.4 billion
4Avon Products$5.7 billion$3.5 billion
5Intimate Brands$5.1 billion$2.4 billion
6Alberto-Culver$2.3 billion$2.2 billion
7Coty$1.8 billion$1.8 billion
8LVMH $9.7 billion$1.7 billion
10 (Tie)Johnson & Johnson$29.1 billion$1.5 billion
10 (Tie)Revlon$1.5 billion$1.5 billion
11Mary Kay$1.2 billion$1.2 billion

Present situation of Avon
Avon Products, Inc. is one of the world’s largest direct sellers of cosmetics and other beauty products. 98% of its revenue comes from the sale of...
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