Case Study for Avon

Topics: Cosmetics, Avon Products, Brand Pages: 25 (8389 words) Published: December 13, 2011
No.| Content| Pages|
1| Brief Introduction of Avon Product Inc.| 2-4|
2.| Situational Analysis A. General External Environment [PEST] 1. Political/Legal 2. Economic 3. Social-cultural 4. Technological B. SWOT Analysis * Strenght * Weakness * Opportunity * Threats C. Industry AnalysisThreat of New EntrantsBargaining Power of SuppliersBargaining Power of BuyersProduct SubsitutesIntensity of Rivalry among Competitors D. Matrix Used 1. Internal Factor Evaluation Matrix[IFE] 2. External Factor Evaluation Matrix [EFE]| 5-1011-1314-1919-22| 3.| Recommendations| 23-25|

4.| Summary and Conclusion| 25|
5.| Appendices| 26-29|

1. Brief Introduction of Avon Product Inc.
In year 1886, a company named The California Perfume Company (CPC) was founded by David H. McConnell. The first company office was in New York. In 1914, CPC opened first office outside United States in Canada. As the Roaring Twenties reached its peak, CPC had more than doubled its sales to $2 million and the representative increases from 10,000 to 25,000 in United States. Company’s home office moves to Fifth Avenue in New York City. The first products were offered under the brand name Avon. These products were toothbrush, talcum and vanity set. David Jr., become the president of the company after his father, David H. McConnell died. Their products were guaranteed and bore the Good Housekeeping Seal of Approval. The company’s name changed to Avon Products Inc in September 193. J.A. Ewald became the president after David Jr. He introduces mechanized billing and took the company public in 1946. In 1954, Avon launched television advertising campaign entitled “Avon calling”. The company became a household name in the United States with the television advertisement catch phrase “Ding Dong, Avon calling”. In 1979, Avon purchased the jeweller Tiffany’s. James Preston, CEO of Avon fought in 1990 to preserve Avon’s independence from a series if takeover attempts. This year Avon announced a permanent end to animal testing, becoming the first major U.S cosmetic manufacturer to do so. In only 5 years that Avon worldwide Fund for Women’s Health had raised to $50 million. Mission Statement:

* The Global Beauty Leader
* The Women’s Choice for Buying
* The Best Place to Work
* The Largest Women’s Foundation
* The Most Admired Company.
5 values of Avon: Trust, Respect, Belief, Humility, and Integrity.

Channel of Distribution:
Avon believes its success rested on its channel of distribution- Direct Selling. Thus, Avon became the world’s largest direct seller with 5.4 million Avon representatives in over 100 countries. Avon’s business model provides company to sell products to its representatives on credit so that they do not pay the company until they get paid by their customers. Minimal start up costs for an Avon business is needed.

In 2006, Avon expended a great deal of time and money improving its representatives’ earning and selling experiences. Investment in representatives is increased to fund a number of initiatives such as the rollout of a new sales leadership opportunity, improved training, changes in the commission structure and new Web-based and mobile-technology tools. Marketing:

Avon distributes 3 products categories: beauty, fashion, home. From 2006-2008, Avon’s home segment had 3.2 % decline in revenues in 2008, Beauty division had 9.6% increase in revenue. Latin America has more revenue and profit for Auon than any other area. During 2008, Avon made a monumental change in marketing of its beauty products. Since its inception, the company always concentrated on a homey image that catered more to suburban housewives than urban trendsetters. Geralyn R. Breig, Avon’s president said that they had fall short in the image of the brand. In their new promotions, they have Avon lady played by actress Reese Witherspoon, MTV star Lauren Conrad and James Bond girl Gemma Arterton. In a...
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