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AVON :

SUNSCREEN
LOTION
LOVELY PROFESSIONAL UNIVERSITY

LAUNCHING SUNSCREEN LOTION : AVON

FARAZ ALAM
12/12/2009
Homework Title / No. : FARAZ ALAM Course Code : MGT-514

Course Instructor : MR. MANISH RAJPUT Course Tutor (if applicable) : __

Date of Allotment : OCTOBER Date of submission : 12-12-2009

Student’s Roll No._____ B35______ Section No. : RS 1901

Declaration:
I declare that this assignment is my individual work. I have not copied from any other
student’s work or from any other source except where due acknowledgment is made
explicitly in the text, nor has any part been written for me by another person.

Student’s Signature :

FARAZ ALAM

Evaluator’s comments:
___________________________________________________________________
__

Marks obtained : ___________ out of ______________________

Content of Homework should start from this page only

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ON

(BUDGET DEFICIT & ITS IMPLICATION : INDIAN GOVERNMENT)

Submitted in the partial fulfillment of the Degree of masters of business


administration

SUBMITTED BY:- GUIDED BY:-

Name : FARAZ ALAM MR. MANISH RAJPUT

Regd. No : 10906032

Roll No : RS1901 B35

SUBMITTED TO

Department of Management Lovely Professional University Phagwra .

ACKNOWLEDGEMENT

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I take this opportunity to present my votes of thanks to all those guidepost who
really acted as lightening pillars to enlighten our way throughout this project that
has led to successful and satisfactory completion of this study.

We are really grateful to our COD Mr.Devdhar shetty for providing us with an
opportunity to undertake this project in this university and providing us with all the
facilities. We are highly thankful to Mr. Manish Rajput for his active support,
valuable time and advice, whole-hearted guidance, sincere cooperation and
pains-taking involvement during the study and in completing the assignment of
preparing the said project within the time stipulated.

Lastly, We are thankful to all those, particularly the various friends , who have
been instrumental in creating proper, healthy and conductive environment and
including new and fresh innovative ideas for us during the project, their help, it
would have been extremely difficult for us to prepare the project in a time bound
framework.

Name : FARAZ ALAM

Regd.No : 10906032

Roll no : RS1901 B35

INDEX

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Executive Summary

Company Description

Business Mission

Marketing Objective

Situation Analysis

Industry Analysis

• Trends

• Competitors

• Customer Profile

• Technology

• SWOT Analysis

Marketing Strategy

• Target Market Strategy

• Marketing Mix

Implementation, Evaluation and Control

• Marketing Research

• Summary

• End Notes

Bibliography

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EXECUTIVE SUMMARY

The project is to find appropriate customer base to launch and establish


new skin care product (Sunscreen Lotion). So the various steps involved
are to be covered in the report. The various aspects to be covered
include a strategy building for market research, to find appropriate
customer base and location from where we will be able to capture
maximum area and seek our requirements: man power, raw material,
land, equipment, future diversification needs, etc, and also steps like
pricing, product design, supply chain selection etc.

I am developing a marketing plan for the introduction of a new skin care


(Sunscreen Lotion) product for women in the Indian market. It will be
targeting the age group between 18-25 years, in a medium-high level
price bracket.

1. So, I am providing information on successful marketing strategies


which are used by me to launch the product in the market.

2. I am also providing details about industry growth trends, key


competitors, segmentation strategies, distribution strategies/channels.
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Company Description

Avon is a US cosmetics, perfume and toy seller with markets in over


140 countries across the world and sales of $9.9 billion worldwide as of
2007. ‘Avon Products’ is a multi-level marketing company. Traditionally a
direct marketing company, Avon’s fastest growing markets today are in
China and Russia. The company’s chairman and CEO is Andrea Jung,
who was promoted to the position in 1999. Avon uses both door-to-door
sales people ("Avon ladies," primarily and a growing number of men)
and catalogs to advertise its products. In some markets (most notably
China, which had banned all door-to-door selling before mid-December
2006) Avon products are sold primarily in retail stores. Avon’s product
lines include lipsticks, foundations, bath and skin lotions, anti-aging
cream, perfumes, as well as jewellery and clothing. Although the
company has always been more directed toward female customers,
Avon’s line of male products continues to expand, and its children’s
products (such as shampoos and toys) have also proved successful.
Two brand diversifications, "MARK." (targeted to younger, college-aged
women) and "M" (an Avon catalogue for men), have helped the
company reach out into markets it has not serviced. Mark proved to be
successful in reaching a new generation of recruits, primarily young
women ages 18-25, with a monthly "magalog" featuring award-winning
products. In 2007, Reese Witherspoon signed a multiyear agreement to
serve as Avon’s global ambassador. The actress was involved in
product development, appeared in advertisements, and served as the
honorary chairman of the Avon Foundation.
Sales leadership was established by Avon in the United Kingdom in
2004. It is a network marketing scheme that pays sales leaders a
percentage of their down lines team sales. Sales leadership is open to
any new and existing Avon representatives.
In addition to its corporate pursuits, the Avon Corporation is involved in
philanthropic causes. The Avon Foundation is an accredited 501(c) (3)
public charity founded in 1955 to improve the lives of women and their
families. The Avon Foundation is currently focused on two key causes:

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breast cancer and domestic violence. Through 2007, Avon raised and
awarded $580 million worldwide.

History

The company was founded in 1886 by then 28-year-old David H.


McConnell who sold books door-to-door and gave out perfume to entice
women to buy his books. His perfume became so popular that
eventually that is all the women wanted. He then founded the California
Perfume Company (CPC) in New York, New York in a 500-square-foot
manufacturing and shipping office at 126 Chambers Street. As the
company grew, he hired his first representative, Mrs. P.F.E. Albee. In
1897, McConnell built a small (3000 square foot) laboratory in Suffern,
New York. In 1906, the West Coast office in San Francisco was
destroyed in the Great Earthquake. In 1914 the first non-US office was
opened in the Canadian province of Quebec. The California Perfume
Company was incorporated on January 28, 1916 by David H. McConnell
and Alexander D. Henderson (businessman) in Suffern, New York.
By 1918, five million units were sold in North America, and by 1928,
sales reached $2 million. In October 1939, the name was changed to
Avon Products, Inc. The company was taken public in 1946. By 1954,
sales reached $55 million, and the "Avon Calling" advertising campaign
introduced. By 1971 the lab would grow into the Avon Suffern Research
and Development facility. By 1979, sales reached $3 billion, with one
million direct sales agents. Today sales exceed $8 billion worldwide. In
2005 they opened a $100 million dollar 225,000-square-foot (20,900 m2)
R&D facility to house its over 300 research and development scientists
on the original site in Suffern, NY. Avon also has offices in Luzerne,
Pennsylvania and Davenport, Iowa.

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BUSINESS MISSION

In order to achieve our Vision, Avon, commits to the following: Avon


mission is to provide glamour, excitement, and innovation to consumers
through high-quality products at affordable prices. The company is
moving into an era of "transforming the beauty industry". Avon aims to
emerge as the dominant cosmetics and personal care firm through the
twenty-first century. Avon continues to focus on developing products to
reach existing customers and to attract new customer groups in both
domestic and international markets. Avon also strives to treat
employee’s equal, fair, honest and with integrity.

MARKETING OBJECTIVE

1. To valorize the brand to occupy a premium position in the market

• By taking big price leaps of their existing range: Avg MRP


up from Rs. 250 to Rs. 400 post 2007

• By launching more and more high value, latest international


products. E.g. colour stay soft & smooth (Rs 575); mineral
foundation (Rs 900), limited editions (Rs 600-1000) as well
as skin care products

2. Focus on strengthening Modern retail operations

3. New international imagery in modern retail

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MICRO AND MACRO ENVIRONMENT

Factor which always affect every product whether that is old or new:-

There are two kind of environment in the market which affects the new
as well as old product. That is:-

 Macro Environment

 Micro Environment

Macro Environment: - which is not controllable.

 Demography Environment

 Economic Environment

 Culture Environment

 Natural Environment

 Political Environment

 Technological Environment

Micro Environment: - which is controllable

 Public

 Supplier

 Company

 Costumer

 Competitors

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PROCESS OF DEVELOPING A SKIN CARE PRODUCT IN THE
MARKET:-

When we launch something in the market. We have to make some


strategies for that particular product. First, we have to look for the
substitutes of that product. Because in this huge market every single
product has a number of competitors. We should look proper
environment for that product. Like now a days many companies are
competing in the field of skin care because now a day’s people are more
concern about their skin or beauty.

Secondly, we have to develop our product, and then we have to launch


that product in the market. We have to fix a perfect price for that product.

Thirdly, advertisements are necessary now-a-days. Without


advertisement people cannot be made aware of that product.

Fourthly, we also have to take into account about the supply of that
product. Controlling and evaluating are the last steps in the product
development.

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INDIA COSMETIC SECTOR ANALYSIS

According to growth rate, the market provides wide opportunities to local


and global players. Even with two times growth rate, the market
penetration of beautification products and toiletries products in our
country is low. This low market penetration for beautification and
personal care commodities in India gives an opportunity for aditional
important growth down the road in India of 1.2 billion populations .

SITUATION ANALYSIS

Competitors:

L’oreal

Revlon

Mary Kay Inc

Estee Lauder companies

SWOT ANALYSIS

 Strength

 Strong Retail presence


 Attractive counters
 Multiple product category
 High quality

 Weakness

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 Need to fill the gap of well informed new product launches.
 Small market
 High prices

 Opportunity

 First mover advantage as it has presence in fragrance and


experience in the price range category
 Has a lager portfolio in order giving high distribution
capacity.

 Threat

 Low media spends may make the brand weak over period of
time resulting to death.
 Other players
 Huge no. of substitutes

MARKETING STRATEGY

TARGET MARKET:

Target market of Avon for its sunscreen lotion will be the upper class
and the womens of metropolitan cities mainly.

MARKETING MIX

Marketing mix of any company involves 4P’s of the company. These are
as given below:
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 Product
 Price
 Place
 Promotion

For the sun screen Avon, these are as discussed below:

PRODUCT:

This is the very first p of the marketing. For knowing about this, we will
be studying product description, segmentation for Avon’s new sunscreen
and what will be the positioning and product differentiation.

Product Description:

There will be 4 main products in the clinic:

• Avon Gold
• Avon Premium
• Avon Platinum
• Avon Pearl

Product Segmentation:

These all products will be segmented on the basis of the following


factors:

1. Demographics:

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• on the basis of age - 18 to 40 years
• on the basis of sex – women only
• on the basis of income – higher income group

2. Geographic:
• On the basis of social class – upper class
• On the basis of region – metropolitans and big cities

3. Psychographics:
• Lifestyle
• Personality

Product Differentiation:

Products under sunscreen will be different from the competitors under


following ways:

• High quality products


• Give softness to skin
• Reduce dryness
• Keep the skin shining

Positioning:

The products will be positioned as follow:

• Only for elite and upper class


• High quality products
• Good for skin

Branding strategy:

The branding strategy for products will be umbrella branding such as:

• Avon Gold
• Avon Premium

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• Avon Platinum
• Avon Pearl

PLACE:

This is the second marketing mix and place for the Avon sunscreen is as
follows:

Metros: Delhi , Mumbai , Chennai , Bangalore and Kolkata.

Other cities: Pune , Meerut , Chandigarh, , Kanpur, Moradabad , Surat ,


Ahemdabad etc.

Distribution channel:

A three tier distribution channel will be followed for the products


distribution:

• Manufacturer
• Distributor
• Stockist
• Retailor and salon

PRICING STRATEGY:

• Market skimming will be there for all the products under sun
screen
• High quality- high price
• High price to target niche market

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DISTRIBUTION CHANNEL

There are three categories of channels of distribution -

• Prestige - Department stores, specialty stores and chain


department stores, such as Macy's, Neiman-Marcus and J.C.
Penney (internationally) and Shoppers’ Stop, VAMA, Westside,
and Bombay Stores etc (nationally).

• Broad - Drug stores, food stores, cosmetic discounters,


warehouse clubs, and mass merchandisers. Such as Eckerd,
Pathmark, Cosmetic Center, Sam's Price Club and Wal-Mart
(internationally) and Satyam, Haiko, Sahkari Bhandar, Beauty
Center etc. (nationally)

• Alternative - is identified by five different marketing methods:


o Direct Sales
o Direct Mail/TV/Print
o Salons (Lokhandwala)

• Sourcing: Imported and Local manufacturing. (AC Neilsen)

Promotion:

Promotional pricing:

Marketing pricing: We will merge with famous existing shops, so that


customer can buy directly from the dealer and hence the element of
middleman is not there.

Here the retailer in this category buys watches for lesser than MRP and
hence they are able to get the profit margin on sales.

Price discount and allowances: We will give price discount sale on the
MRP of the sun screen at initially. The allowance varies from one
segment to another.

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Type of advertising: Our ads will be clean, well made, touch on
emotional chord. As our company will use superstar Katrina Kaif.

As here we can say that the Katrina Kaif would be more effective for the
promotional purpose. It can be Katrina Kaif, as now she is one of the
popular actresses in Bollywood.

A. Promotion on occasion: Our Company will also promote the


product on the famous occasion & festival depends upon time,
place and culture.

POSITIONING STATEMENT

AVON approached with AVON SUNSCREAM LOTION in 2009. It


promoted as “SHEILD AGAINST SUN ”. This positioning statement
demonstrated young girls who anticipated the image of trying to be
unusual and "cool".

SEGMENTATION

Geographic

• Area: Metropolitan cities and town

Company has targeted metropolitan cities and town because of


population, consumer knowledge about the product is
considerable and towns are upcoming business places.

Behavioural

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Occasions: Going out regularly (schools, college and parties)
User status: Regular usage
Attitude towards the product: necessary part of everyday accessories.

Benefits: develops beauty, exceptional colors, good quality ingredients,


atmosphere friendly packaging.

Demographics

• Age: 18-40

They targeted age 18 TO 40 and product launched to cover


teenagers.

• Education: Students or graduates.

Students and graduates have more knowledge about the product.

• Sex: female.

Product was launched only for female.

• Occupation: students and working women

Company has targeted students and working women, because


basically Redwood was to cover students and working women.

• Life cycle: young, single and married.

When it comes to Life Cycle Stage Company targeted to young,


single and married, because they have more influence to buy the
products.

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• Social class: Middle and lower class people

People have enough money to afford the product.

PEST ANALYSIS

P for political factors

E for economic factors

S for socioculture factors

T for Technological factors

Pest analysis is to summaries the legal and external environment for the
business. It should be done in consideration of influence and responses
to the business. These are the pest analysis of Redwood nail enamel.

POLITICAL FACTORS

Indian cosmetic industries is least affected when compare to other


developed economy and Indian cosmetic industry developed by 7.5%,
which attributed to our policy frame work with respect to capital and
liquidity. Avon sunscreen lotion have built strong links with trade based
on mutuality in support of Indian government.

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ECONOMICAL

Indian economy registered a growth of more than 9 % for last three


years and it maintained robust growth rate as compare to other
countries which are developed and developing, so Indian cosmetic
industry is directly related growth of economy, which is highly support
cosmetic industry.

SOCIAL

Avon have loyalty factor as compared to counter part in other


countries. They are strong in organizing social and promotion
events and other fashion events, which build huge reputation
among the people.

TECHNOLOGY

Technology advancement changes the face of traditional Indian


cosmetic market. It is giving faster and secured service, strong
consumer understanding and technology of company has been
delivered world class product. Company also introducing new innovating
technology due to advancement in technology, Hence technologies
continue to evolve and it will meet consumer expectations and habitats.

MARKETING PLAN FOR NEXT ONE YEAR

Since, industry grows at 12.5% per annum, and there is considerable


income growth of middle class people is an opportunity to develop the
business. Hence beautification is fast growing segment in the market,
more number of women becoming awake of looking better through the

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use of beautification products. This low market penetration for
beautification and personal care commodities in India offers a chance for
more considerable increase, in this country of 1.2 billion people.

Company targeted only younger age people to sell their products, and
targeted only middle class and lower class people. Tupperware can
introduce new products to cover upper end of the market. Company
already built a brand image among middle class. So it will help them to
capture the upper class market very soon. Since the customers are able
to pay for better products which makes them happy and looks better. So
Avon sunscream lotion can concentrate to initiate product lines on
premium range. Avon competitor Revlon launched street wear to
compete with Avonsuns cream lotion, so company can consider to more
depth in product range and to influence new innovation technology.

Now company targeting only 18 to 40 age people and they can spread
their segmentation level from age 10 to 24. They can advertise to cover
school students. Company should be very sensitivity about price of the
product; they should not increase the price of the product because low
price is the major strength for Avon sunscreen lotion. Avon sunscreen
lotion have good distribution channel in metro politic cities and towns,
beautification products has less penetration in rural area so Tupperware
can improve their distribution channel in rural market.

Company can offer combo set of products to the consumers and if they
give nail enamel remover along with the product it will help them to
increase the sales. Company has to advertise to create more awareness
about the product.

Bibliography
Marketing Management – Philip Kotler

Marketing Plan Provided by Manish Rajput Sir

www.avon.com

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