Roll No : 12 HR- 035
SECTION : S7
Non Store Retailing (AVON.COM)
Sales Representative of AVON:
The following graph shows the growth of Sales force in US and the total growth from year 95 to 00.
From the graph it can be seen that the number of sales representatives have remained almost constant in U.S while the total number of sales representatives have increased. However the operating profit has increased from 296.9 to 374 from 1997 to 1999. Thus to penetrate further into U.S markets, Avon.com should be promoted in U.S with rigour.
Avon has 500,000 sales representatives comprising of 5% of all americans involved in direct selling. Almost all were women, age in 30s to 40s, and sold avon as second job. Each representative spent 15 hours weekly selling.
20% of the sales representatives sold Avon products full time. They belonged to presidents’ club. Remaining 80% worked part time, and the turnover amongst the part time representatives was much higher.
Challenges and Suggestions
However Avon faces a challenge of 100% turnover of sales force. The reasons for these could be that many representatives cannot bear the rejection they get from customers and many lack the communication skills to convince customers into buying the products.
Hence Avon should invest more in training and development of the new representatives. Also the selection of the representatives should be more stringent to ensure that only capable people become representatives.
Avon should also recruits more male representatives. The male representatives can present Avon to their colleagues at work as gifting option for their spouses and daughters.
Also Avon should include products for Men’s care as well and such products can be marketed by the male representatives
Customers of Avon:
Avon is designed to appeal to almost 25 million US women aged 25-50 with average to below average income.
To increase its revenue, Avon can include high range products to appeal to the higher income category of women. Avon representatives can place the brochures in high range beauty parlours and salons, to attract the customers visiting such parlours. Alternatively they can also try engaging the parlour employees to become representatives and thus benefit from the leadership program and also sell high range products.
Also with almost, 5 million stranded customers, Avon faces the challenge of gaining back such customers. To battle this, Avon should print helpline numbers on the brochure stating that if the customers face any issue finding a sales rep in future, they can contact the helpline number and a sales rep would be assigned to the customer by the company.
To improve customer data base, Avon can use incentives like giving credit point to the customer for each purchase worth minimum base amount. The credit points can be redeemed for certain products in future. To earn the credit point, the customer should call the hotline number and register himself and give the bill number.
Selling Campaign of Avon:
Avon conducts 26 – two week selling campaign every year. Each representative participated in 12 such campaigns.
Thus effectively less than 250,000 sales representatives participated per campaign.
Each rep had average 15 customers, hence almost 250,000 *15 = 3750000 customers could be reached per year.
Thus it could reach (3750000/25000000)*100 = 15% of its target customer base in each campaign.
Because of the higher selling cycle, Avon has to come up with new products at a fast rate. Avon’s new product introduction is atleast double its average competitor. Avon introduces almost 1000 new products every year.
But Avon spends the same amount on Rand D as its average competitor. This success can be attributed to the matrix like structure where members from several departments work simultaneously on various aspects of same project
Source : Avon- Building the...