Marketing Mix and Market Segmentation

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Market Segmentation
Marketing Mix in Avon

Report on the effects of use Marketing Mix and Market Segmentation by the Avon Company

Prepared for


30 November 2010


1. Introduction3
2. Market Segmentation by Avon4
3. Marketing Mix by Avon:5
* Product5
* Price5
* Place5
* Promotion6
4. Conclusion7
5. Bibliography8


This report evaluates the marketing mix and market segmentation in the Avon Company. Established in the USA in 1886, today Avon is the world’s leading direct seller of beauty and related products, reaching customers in over 137 countries through 5.8 million independent sales representatives. To grow its business, Avon:

* tries to develop the right balance between the main four elements of the marketing mix (product, price, promotion and place - "the 4 P's"), * uses market segmentation to divide its market into distinct groups who share common needs, wants, demand characteristics and interests and who are likely to be attracted to particular products or services.

Market Segmentation
Consumer markets can be segmented on the following customer characteristics: 1. Geographic segmentation is based on regional variables such a region, climate, population density and population growth rate. * Avon offers products throughout six regions – Asia Pacific, Central and Eastern Europe, China, Latin America, North America, Western Europe, Middle East and Africa. 2. Demographic segmentation is based on variables such age, gender, family status, income, education, ethnicity, nationality, religion, social class. Avon offers an extensive range of products for:

* women, men, children.
* teenagers, the older generation.
3. Psychographic segmentation groups customers according to their lifestyle, activities, interests, attitudes and values. * Avon has launched cosmetics and personal care lines exclusively for men (for family men, career men and athletes). 4. Behavioural segmentation is based on actual customer behaviour towards products. Some behavioural variables include: usage rate and patterns, brand loyalty, benefits sought, user status, readiness to buy and occasions. * Avon promotes unique products and discounts for special occasions: International Women Day, Mother’s Day, Father’s Day, and Christmas.

The demographic segmentation has helped Avon to expand their products range to meet consumers demand, needs and satisfaction and to target bigger market around the world. The power of Avon’s global operating model has positioned the company as the top direct seller of cosmetics in the world and the most trusted brand.

Marketing Mix

* offers products in three categories:
1) Beauty (Cosmetics, Fragrances, Skincare, Toiletries)
2) Fashion (Fashion, Jewellery, Watches, Apparel, Accessories) 3) Home Products (Gifts and Decorative Products).
* expanded into new segments, to target more customers:
* the youth market with line of cosmetics and related trendy products (fun, modern packaging; affordable pricing), * the “metrosexual” market with cosmetics for men,
* the older generation with cosmetic and wellness products, * the international market.
* reviews and eliminates poor performing products to combine better near duplicate items.

Avon strategies:
* periodically price reductions,
* lower prices for a new product line to encourage sales, * free Avon gifts for customers who spent stated amount on Avon products, * discounted products at the end of production line,
* produces mostly moderately priced products in relation to the industry, * opened manufacturing plants outside U.S. to reduce material and transportation costs, and exchange rates, * direct-selling model eliminates the middle-man (department and cosmetic stores),...
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