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Transcript of Avon
Group Member 2
Group Member 3 Avon Markets Marketing
Mix Product Existing Existing New New Markets Offerings Ansoff Product-Market Expansion Avon Overview
Monitor and Control
References Agenda Political Corporate tax rate: 30%
Plans to minimize country's corruption have been set in place.
They adopted International Labour Organisation conventions that set a minimum age of 16 for children working Economy The Nigerian economy is growing at a rate of over 7% p.a. as at 2011, according to IMF projections.
It has the second largest economy in sub-Saharan Africa.
Disposable Income $713.29 Social Nigeria has the biggest population in Africa 170,123,740
Age structure: 0-14 years: 43.9%
15-24 years: 19.3%
25-54 years: 30%
55-64 years: 3.8%
65 years and over: 3% Strategy Segmentation Target Positioning FRAGRANCE COLOUR COSMETICS SKINCARE BATH AND BODY English is widely spoken and accepted as the business language.
Nigerian consumers of all classes have an intense appreciation for brands. Fragrance Skin Care Colour Cosmetics Bath and Shower Price Technology The Nigerian government offer a number of investment incentives to promote foreign direct and internal investment. Environment Climate
Equatorial in south
Tropical in the centre
Arid in the North
Projects to upgrade the country's infrastructure are Primarily EU funded.
Main transportation to the market
Largest port in Nigeria is Lagos with 20 berths and 15 warehouses. Second largest is Port Harcourt with 9 berths. Other ports are at Warri, Sapele and Calabar. Legal Import Regulations
Registration of all food, cosmetics and drugs must be done with the ‘’National Agency for Food and Drug Administration and Control (NAFDAC).’’
Labelling and packaging regulations
For shipping the Import Duty Report (IDR) numbers must always be quoted on the shipping manifest before the submission to the Nigeria Customs Service.
N 18,000 per month Culture and Values Nigeria
Market Size Differentiated targeting by having different marketing strategy for different range of products.
Consumer client psychology
Usage: Medium to high usage groups
Loyalty status: Split loyals High Popularity Low Popularity Low Price High Price Consumer Client Psychology Avon CRM Promotion Place Physical Evidence People Process Packaging Business Cards Brochures Free Samples Campaign starts for three weeks on delivery of brochures.
Distribute brochures amongst friends and family.
Collect completed order forms in a few days
Representative places any orders made through Avon website.
Once the goods have been sent from Avon to representative they will then deliver the goods to the end consumer and collect payment.
Representative deducts any commission made and sends the rest of the money to Avon.
New campaign will resume with the next set of brochures. Recruitment Process Buying Process Independent sales leaders
Sales leaders can build own sales representatives
£25 investment fee to become sales leader
Earn 25% commission Market Entry – Acquisition Forever Living Products Current Distribution Centres in: Lagos, Abuja, Port Harcourt and Warri.
Recorded Sales in Nigerian Naira – 2.52 billion (US$ 1.5m)
Number one sales in Africa and number 10 global sales (2010) Attitude:
Highly favored foreign brands
Use make-up as a way to enhance self concept& boost confidence (value expressive function)
Self-perception because they are conscious of their appearances & it is part of their beauty regimes
Print advertisement in magazines
Global fashion trends
High influence of the Western cultures & satellite TV promotion Product Life Cycle Product Life Cycle in Nigeria Product Implementation Factors Affecting Product Adaptation in Nigeria:
Trends towards formal packaging
Dry & damp climate
Focus on strengthening the marketing promotion
Prohibition of using cosmetics for some religions
Price sensitive consumers Source: Johnson et al., 2008, pp. 68 BCG Matrix PRICE SKIMMING Skincare - £12 - £40 Bath & Body - £3 - £30 Fragrances - £3 - £20 Fragrances - £2.50 - £17 Skincare - £11.50 - £37 Skincare - £11 - £35 Bath & Body - £2.50 - £27 Bath & Body - £2 - £25 Fragrances - £2 - £15 Avon customer loyalty ladder Having the customer appreciation sales encourages customer loyalty Advertising and promotions strategy
The free testers Family members and friends of sales representatives Loyal customers who become a sales representatives People who are aware of the brand Geographic:
Lagos (urban areas)
Gender & Age: Female aged 25-50
Income: Middle to high income
Occupation: housewives, employees, university students
Family life cycle: Young & single, married couples + married couples with children
Interest & lifestyles:
Look for practicality and convenience
The lifestyle revolves around family
Want to look their best Porters Five SWOT Analysis Strengths Weaknesses Threats Opportunities Avon is one of the leading global beauty companies which is a great advantage to attract new customers.
The largest direct selling beauty personal care brand in the world.
Share in emerging markets that are underdeveloped with a large population.
Independent sales Representatives, this gives Avon more control over its distribution. Weak advertising in comparison with their competitors.
Lack of marketing & strategic focus for the non-beauty products such as the apparel and jewellery lines.
Does not target urban trendsetters
Limited distribution channel (Avon website and representatives). Take advantage of the demand for international brands.
Offer a special skincare range with oil and coconut products which is highly preferable.
Offer Afro-textured hair products Changes in customs regulations could cause delays for product importation
Depreciation of the Naira
International brands competition Threats of new entry
Low entry barriers
Need the right connections first in order to do business. Threats of substitutes
Products from China
Use of natural resources such as mud, oil and minerals. Bargaining power of buyers
Loads of popular foreigner brands choice and locals.
Buyers are keen to buy expensive and branded products due to increases in disposable income. Bargaining power of suppliers
The industry is mainly dominated by foreign companies, which makes it tough for local manufacturers.
High competition Competitive rivalry
Is mainly dominated by foreign companies
Indirect competition with buyers buying overseas. Consider product development
for hair products to suit Afro hair texture. Recommendations Recommendations Further expansion into additional cities on event of successful results in test market. Recommendations Further Expansion into African
Markets - Kenya and Algeria Control & Monitoring Monitoring customer feedback via text message or in person.
Pay particular attention to certain effective strategies.
Evaluate summary of sales every 3 months.
Track and review customers’ order every 3 month. Maslow Hierarchy of Needs Internet users: 43.989 million
Telephones main lines in use: 719,400
Mobile phones: 95.167 million Nigeria has a diverse culture with Hausa, Igbo and Yoruba tribes being the three largest and most influential ethnic groups.
Nigerians love to bargain and can occasionally run behind schedule which is also known as the ‘African Time'. Avon (2012) Avon speaks Out Against Domestic Violence [online] Available from: http://www.avon.uk.com/PRSuite/c_domestic_against.page [12 March 2013]
Avon Company (2012) Vision & Mission [online] Available from: http://www.avoncompany.com/corporatecitizenship/corporateresponsibility/vmvp/index.html [28 February 2013]
Belfast Telegraph (2012) How to Become A Successful Avon Sales Representatives [Online] Available from: http://www.belfasttelegraph.co.uk/woman/life/how-to-become-a-successful-avon-sales-representative [11 March 2013]
BRECAN (2013) About Breast Cancer Association of Nigeria [online] Available from: http://brecan.org/about/ [12 March 2013]
Cia Factbook (2012) Nigeria [online] Available from: https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html [29 February 2013]
Deloitte (2012) Corporate Tax Rates 2012 [online] Available from: http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Taxation%20and%20Investment%20Guides/matrices/dttl_corporate_tax_rates_2012.pdf [28 February 2013]
Department of State (2012) U.S. Relations with Nigeria [online] Available from: http://www.state.gov/r/pa/ei/bgn/2836.html [19 February 2013]
Doing Business (2012) Economy Profile: Nigeria [online] Available from: http://francais.doingbusiness.org/~/media/fpdkm/doing%20business/documents/profiles/country/NGA.pdf [12 March 2013]
Doing Business (2013) Employing Workers in Nigeria [online] Available from: http://www.doingbusiness.org/data/exploreeconomies/nigeria/employing-workers/ [12 March 2013]
Euromonitor (2012) Beauty and Personal Care in Nigeria [online] Available from: https://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx [09 March 2013]
Euromonitor (2012) Colour Cosmetics in Nigeria [Online] Available from: https://www.portal.euromonitor.com/Portal/Pages/Analysis/AnalysisPage.aspx [11 March 2013]
Euromonitor (2012) Consumer Lifestyle in Nigeria [Online] Available from: https://www.portal.euromonitor.com/Portal/Pages/Analysis/AnalysisPage.aspx [11 March 2013] References THANK YOU Nigeria has one of the highest rates of domestic violence in Africa.
More than two thirds of Nigerian women are believed to experience physical, sexual and psychological abuse at the hands of their husbands.
WOCWI works with vulnerable women and children who experience violence, forced marriages, trafficking, HIV and other severe social problems. As a company for women, Avon is committed to support the causes that matter most to women. BRECAN is increasingly improving the lives of many touched by breast cancer who would have succumbed to the disease due to ignorance and lack of support. Breast Cancer Association of Nigeria (BRECAN) is a leading not-for-profit and non-governmental organisation that take action against breast cancer in Nigeria. Supporting charities will build and increase a positive reputation amongst the target market.
Will help to increasing brand loyalty.
It can spread a positive attitude amongst the audience which will enhance Avon’s credibility as an company. AVON Overview References Financial Times (2012) Africa: Lessons from Lagos [online] Available from: http://www.ft.com/cms/s/0/8b24d40a-c064-11e1-982d-00144feabdc0.html#axzz2NjP8ArAv [05 March 2012]
Johnson, G., Scholes, K. & Whittington, R. (2008) Exploring Corporate Strategy. Harlow: Pearson Education
Haven Refuge (2013) Domestic Violence in Nigeria [online] Available from: http://www.havenrefuge.org.uk/index.php?option=com_content&view=article&id=84&Itemid=90 [12 March 2013]
PUNCH Nigeria (2012) Lagos literacy level is 87% [online] Available from: http://www.punchng.com/news/lagos-literacy-level-is-87/ [13 March 2013]
The New York Times (2012) Nigeria Tested by Rapid Rise in Population [online] Available from: http://www.nytimes.com/2012/04/15/world/africa/in-nigeria-a-preview-of-an-overcrowded-planet.html?pagewanted=all&_r=0 [13 March 2013]
The Atlantic (2012) This Is Africa's New Biggest City: Lagos, Nigeria, Population 21 Million [online] Available from: http://www.theatlantic.com/international/archive/2012/07/this-is-africas-new-biggest-city-lagos-nigeria-population-21-million/259611/ [13 March 2013]
UK Trade & Investment (2012) Doing Business in Nigeria [online] Available from: http://www.ukti.gov.uk/uktihome/item/110465.html [25 February 2013] Objectives and Strategies Avon is a New York-based beauty and household company that has operated in the industry since 1886.
Avon is the biggest direct selling company in the world
Avon has a total revenue of more than US$11 billion in 2011 with over 6.4 million sales representatives. Avon aims is to become a leader in global beauty in satisfying women’s needs by delivering the best product to its consumers
Avon’s five values are Trust, Respect, Belief, Humility and Integrity
Avon has extension brands that include Mark, Liz Earle, Silpada & Tiny Tillia Make-up Fragrance Skincare Home Fashion Bath & Body Promotion Celebrity endorsement Social Events Special
Promotion Colour cosmetics £2 - £15 Colour cosmetics £2 - £13 Colour cosmetics £1.50 - £10 Hierarchy of Effects Model Tri-Component Manufacture Customers Sales Representatives Direct
Distribution Population: 21 Million
literacy rate: 87%
Sales rep: 20.000
Customers: 480.000 Marketing Objectives
Achieve a market share of 2.3% by the end of the 3 year test period.
Increase brand awareness within our target market by a minimum 50% by the end of the first year.
Increase the number of customer enquires in Lagos by 5,000 per month.
Achieve minimum of 95% excellent customer service rating each month. Marketing Strategies
Provide in-depth training schemes for sales representatives.
Use advertising and promotion to increase brand awareness.
Offer a guaranteed delivery time of 3 days maximum. Conclusion Positive economic growth in Nigeria has boosted the confidence of consumers.
Predicted growth in the industry gives Avon the opportunity to establish themselves within a growing market.
Lagos is the most populous city in Nigeria therefore giving the chance for Avon to maximise their profit.
Influence from the western culture gives Avon a healthier chance of success within the Nigerian market.
Previous indirect awareness enhances the interest that the Nigerian consumers have in Avon products.
Poor infrastructure will encourage consumer to opt for direct selling due to its convenience. Recommendations Avon can consider using acquirer’s manufacturer if they decide to continue with plans for full-scale launch PZ Industries Plc has the second largest market share within the beauty and personal care market. This is due to the large product diversification's that PZ Industries Plc has the offer the market.