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Case Study: Avon

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by

Harmony Nelson

on 25 February 2016

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Transcript of Case Study: Avon

Solution B
Increase marketing dramatically

Additional internet marketing

Analyze company to find best top leadership fit

Target new customer base, differentiate more

Scale up production and efficiency across the board
Solution C
Outsource manufacturing and focus on selling

Hire a top leader to focus on weak areas of company

Revamp branding

Abandon direct sales strategy and expand sales of cosmetics to stores
Preferred Solution:
Issues
Concentrated too much on products rather than sales methods

Selling strategy weakened by
e-commerce

Struggle to find effective top leadership

Loss of loyalty/brand recognition

Competition stemming from increased customer buying power
Solution A

Statement of Facts
Solution A
Case Study:
1886
Started the California Perfume Co.
Connecting women with sales
1920-2008
Went from sales of over $1 billion to sales of over $10 billion
2010-2011
Avon acquired Silpada and Liz Earle for $828 million
Share price decreased by 50%
Charge of bribery from SEC
CEO and Executive Chairman leave
Currently...
Avon is largest makeup company in the world (100+ countries, 6.4 million active sales reps)

Facing competition from other beauty companies

Recent celebrity endorsers:
Fergie, Cher, Patrick Demsey

Relies on many suppliers but manufactures in-house
New training program + improve loyalty rewards

Combine direct selling with social media internet tools

Create top leadership team to replace single-leader model

Increase area-specific products and sales techniques internationally
New training program + improve loyalty rewards

Combine direct selling with social media internet tools

Create top leadership team to replace single-leader model

Increase area-specific products and sales techniques internationally
Strengths:
Directly addresses international problems Avon has faced
Does not alienate current buyers

Weaknesses:
Creating online infrastructure can be expensive

Opportunities:
New customers (younger) could be a new target market for Avon online services
Improve the image of Avon worldwide and gain untapped profits from international efforts

Threats:
High competition from other companies that have already flooded the online market (Ipsy, monthly subscription makeup services)
Must have a successful online strategy or face failure
Full transcript