Case Title: Future of Avon China: Direct Sales, Retail Sales or Both
1. What is the central issue in this case?
Avon China [who] is given the opportunity to consider the previously successful but fallen direct sales strategy which possesses challenges alongside the opportunity [what] in the distant future [when] because [why] * Chinese officials have intermediately lifted the direct-sales strategy ban after the economic instability in 1998 * With the ban lifted, competition can impede on Avon’s retailing strategy
Avon China does not want to limit its grown opportunities at this current time. At present, China has been geographically saturated with Avon boutiques but might net handsome profits by adopting a hybrid selling strategy to capture rural shoppers that don’t or can’t visit retail outlets.
2. What are the alternatives and chosen alternatives?
Alternative 1: Avon China keeps its current retail sales via boutique and does not reintroduce the once successful direct-sales strategy that is continually successful in other geographic regions. Alternative 2: Avon liquidizes the retail boutiques and adopts direct sale strategy that was once the only strategy. Alternative 3: Avon converts the retail boutiques into service centers to offer after-sales service to sales representatives, including pickups, product returns, credits, product trials, billing assistance and provide beauty consultation services to consumers.
Alternative 1: Avon is encouraged to keep their original Retail “beauty boutique” strategy because history often repeats itself. Pyramid schemes would bear a poor brand association with Chinese consumers because of the economic instability caused in 1998. Simply because the Chinese government has lifted the direct-selling band, it doesn’t suggest that Chinese sales representatives will likely follow that career path due to risk of being pressured to stock up by their agents and then being...