Avon Case Study

Topics: Marketing, Sales, Selling Pages: 22 (6171 words) Published: March 14, 2013
I. Problem Statement: How will Avon Products Inc. reposition its brands image to increase customer loyalty?
Sub- problem:
On what product category will the company focused their marketing strategies?– Home, fashion, beauty?
Will the company continue to offer home products?

II. Vision and Mission
Vision (actual): To be the company that best understands and satisfies the product, service and self-fulfillment needs of women—globally.

Vision (Proposed)
To be the company that best understands and satisfies the product, service and self-fulfillment needs of women—globally through the skilled sales representatives.

We added the last words “through the skilled sales representatives” since we want to emphasize the importance of the sales representatives on achieving the global vision of Avon that is understanding and satisfying the product, service, and self-fulfilment needs of women.

Mission (actual): Avon's mission is focused on six core aspirations the company continually strives to achieve: * Leader in global beauty: Build a unique portfolio of beauty and related brands, striving to surpass competitors in quality, innovation, and value, and elevating Avon's image to become the world's most trusted beauty company.  * Women's choice for buying: Become the shopping destination for women, providing a personal, high-touch experience that helps create lifelong customer relationships.  * Premier direct-selling company: Expand Avon's presence in direct selling, empowering women to achieve economic independence by offering a superior earnings opportunity as well as recognition, service and support, making it easy and rewarding to be affiliated with Avon.  * Most admired company: Deliver superior returns to shareholders by pursuing new growth opportunities while maintaining a commitment to be a responsible, ethical company and a global corporate citizen that is held as a model of success.  * Best place to work: Elevate the company's leadership, including its high standards, respect for diversity, and commitment to helping Associates achieve their highest potential in a positive work environment. * To have the largest foundation dedicated to women's causes: Be a committed global champion for the health and well-being of women through philanthropic efforts, with a focus on breast cancer, domestic violence and women's empowerment.

There will be no proposed mission as it will be the same with the actual mission of the company. Their actual mission with the six core aspirations coincides with our strategies of empowering the salespersons, as described in their premier direct-selling company, most admired company, and the best place to work aspirations; and improving their marketing strategies, as described in their aspirations of being the leader in global beauty, women's choice for buying, and the largest foundation dedicated to women's causes. III. INTERNAL ANALYSIS

Financial Ratio Analysis
Liquidity ratios| 2008| 2007| 2006|
Current ratio| 1.221| 1.151| 1.308|
Quick ratio| 0.875| 0.810| 0.955|
Leverage ratio| | | |
Debt-TA ratio| 0.889| 0.876| 0.849|
Debt-Equity ratio| 8.000| 7.033| 5.627|
LTD/Equity ratio| 2.158| 1.641| 1.481|
Times Interest Earned| 13.334| 8.095| 8.063|
Activity ratio| | | |
Inv. Turnover| 10.606| 9.540| 9.734|
FA Turnover| 7.955| 7.776| 7.966|
TA Turnover| 1.760| 1.739| 1.673|
AR turnover| | | |
Profitability ratios| | | |
Gross Profit Margin| 0.631| 0.603| 0.608|
Operating Profit Margin| 0.125| 0.091| 0.092|
Net Profit Margin| 0.082| 0.053| 0.054|
ROA| 0.144| 0.093| 0.091|
ROE| 1.297| 0.746| 0.604|
Growth ratios| 2007-2008| 2006-2007|
Sales| 7.56%| 13.40%| |
Net Income| 64.93%| 11.12%| |

Sales is increasing but in a decreasing rate of almost 7%. The decrease was on the decreasing sales from home products. Even when Avon...
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