Avon Products, Inc.
This paper aims to present the two sides of the grand strategy by Avon in increasing its sales through the expansion of its distribution and capturing a large market in the industry. Avon Products, Inc. is a manufacturer and marketer of personal care products, including skin-care, hair care, color cosmetics, fragrances, personal hygiene, and a limited line of non-personal care products such as jewelry, apparel, decorative and home entertainment products and a provider of spa services. The company distributed its products primarily through the direct selling channel. It was considered the world's largest direct seller of affordable quality beauty products. In Support of the Grand Strategy Selection by Avon
In 1999, Avon president and CEO Andrea Jung developed a successful grand strategy to expand the companies' distribution capabilities and attract new customers. The plan was focused and directed on increasing the companies sales and earning. One of the main objectives was to broaden Avon's retail presence in the United States. By partnering with large retail chains such as JC Penney and Sears, the company would be able to create a store within a store where it could introduce a new and more upscale exclusive product line. By selling its products in department stores the company would benefit from increased profits, sales, and nationwide exposure allowing the company to continue attracting the baby boomer segment. The plan was financially possible since it would only require the company to invest $15-20 million to launch the products in the retail locations and the bulk of the expenses such as advertising, overhead, and employee salary, would be carried by the departments stores. The baby boomer segment, estimated at 81 million people was comprised of individuals aged 35-53 years old and the largest demographic segment. The boomers were expected to grow 16 percent over the next five years reaching $1,080 billion by 2003. This...
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