1.) Define all of the major potential segments for Avon and specify the approximate number of customers/prospects in each of the segments defined.
The mass market for Avon’s U.S. products consists of 25 million U.S. women aged 25-50 with average to below-average household incomes. This mass market can be divided into six segments that will allow Avon to target customers and prospects appropriately.
The six segments are:
1.) Rejecters (3 million) – This segment is not willing to buy products produced by Avon due to various reasons. They have preferences for other brands of products or do not like the Avon business model.
2.) Direct Mail Customers (1 Million) – This segment wants to receive brochures through the mail and order without going through a sales rep. They tend to have very small order sizes.
3.) Online Customers (2.5 Million) – This segment wants to buy products from the company website, Avon.com.
4.) Retail Customers (1 Million) – This segment wants to go to an actual store or mall to purchase products. They want to be able to take the product home with them instead of waiting for it in the mail.
5.) Sales Rep Customers (12.5 million) – This segment wants to buy products through one of the 500,000 sales representatives. The customer typically has a personal relationship to the sales rep.
6.) Stranded Customers (5 million) – This segment consists of previous customers who do not know where to buy again because their sales rep has quit or moved. Since there is a large turnover with sales reps, this segment is rather large.
2.) Identify the “Pros” & “Cons” of targeting each segment defined in the answer to question #1.
Pros: This is a large market with potentially a lot of new customers if they can be converted. If Avon could successfully turn them into new customers, they might be able to find new recruits.
Cons: Avon might spend a lot of money trying to convert people who will never buy regardless of...
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