Q1.

A. What are the distribution channel and advantage and disadvantages of distribution?

The distribution channel is the medium from where goods pass through from producer to consumers. It is in fact part of supply chain where goods are delivered from point of production to point of consumptions. There are various channel of distribution as follows. Distributors: Retailer: Direct Marketing: He who works directly with retailer He may also named as Wholesaler. He who deals with customer directly Where company does not need to work with wholesaler and retailer to reach end user customers. It reaches directly to them by themselves.

There are plenty of advantages due to which company has to adopt distribution channels which may be as follows; Cost Saving: Time Saving The distributors help company to reach end users at low cost as they are good at transportation. Time delivery is more important than cost saving and that is where distributors can help more company to work with. This may be distributors competitive advantage as well. Channeling results easy reach of products so that customers do not need to spend more time and travel to get reach to buy those products. Distributors can help them easy access to customer to get reach easily to products of their choice.

Customer Convenience

Customers can buy in small quantities

Resellers help in boosting sales

Customers receive financial support

Resellers provide valuable information

There are some disadvantages as well;

Revenue loss

The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final customers. Therefore the manufacturer goes for a loss in revenue. The intermediaries would never offer their services to the manufacturer unless they made a profit out of selling his products. They are either made a direct payment by the manufacturer, for instance shipping costs or as in the case of retailers by selling the product at costs higher than the price at which the product was bought from the manufacturer (also known as markup). The manufacturer could have sold at this final price and made a greater profit if he had been managing the distribution all by himself.

Loss of Communication Control

Along with loss over the revenue the manufacturer also loses control over what message is being conveyed to the final customers. The reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. He might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The marketer may provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.

Loss of Product Importance

The importance given to a manufacturers product by the members of the distribution channel is not under the manufacturers control. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. Similarly a competitors product may enjoy greater importance as the channel members might be getting a higher promotional incentive.

B.

What is the opportunity and threats

In business world Company has to deal with internal and external factors of business atmosphere. Internally company has to work on strengths and weakness to get improve over business processes. Similarly externally organization needs to look for threats and opportunity arises due to many of economic, social, financial and political factors. SWOT analysis is the best way to present them in an orderly fashion.

The below is the SWOT analysis of a HR consultancy firm.

Strengths

Weaknesses

Opportunities

Threats

Reputation in marketplace

Shortage of consultants at operating level rather than partner level

Well established position with a well defined market niche

Large consultancies operating at a minor level

Expertise at partner level in HRM consultancy

Unable to deal with multi-disciplinary assignments because of size or lack of ability

Identified market for consultancy in areas other than HRM

Other small consultancies looking to invade the marketplace

Q2. Global Marketing Mix 4Ps (Price, Promotion, Place, Product)?

Elements of the global marketing mix
The Four Ps of marketing: product, price, placement, and promotion are all affected as a company moves through the five evolutionary phases to become a global company. Ultimately, at the global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.) it is impossible to launch identical marketing plans worldwide. Nisant Chakram(Marketing Management)

Product
A global company is one that can create a single product and only have to tweak elements for different markets. For example, Coca-Cola uses two formulas (one with sugar, one with corn syrup) for all markets. The product packaging in every country incorporates the contour bottle design and the dynamic ribbon in some way, shape, or form. However, the bottle or can also includes the countrys native language and is the same size as other beverage bottles or cans in that same country.

Price
Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and much more. Additionally, the products position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something inbetween helps determine the price point.

Placement
How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the products position in the market place. For example, a high-end product would not want to be distributed via a dollar store in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique.

Promotion
After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global companys marketing budget. At this stage of a companys development, integrated marketing is the goal. The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge.

Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of

scale are maximized. Market research measures such as Flow of Attention, Flow of Emotion and branding moments provide insights into what is working in an ad in any country because the measures are based on visual, not verbal, elements of the ad.

Advantages and Disadvantages

Advantages

The advantages of global market we can introduce our product by using advertising Economies of scale in production and distribution Lower marketing costs Power and scope Consistency in brand image Ability to leverage good ideas quickly and efficiently Uniformity of marketing practices Helps to establish relationships outside of the "political arena" Helps to encourage ancillary industries to be set up to cater for the needs of the global player Benefits of E Marketing over traditional marketing

Q3.

Competitors of AVON

Avon has been working almost around the world and has different business setting in different continents. In USA cosmetics industry is very competitive and challenging where Avon was loosing business and that is what has taken Avon to global. In cosmetics industry there are various big name which constitutes most of the business globally regardless of the geography and other factors as well. For example Avon has been in duel with P&G, LOreal, Unilever and Estee Lauder intensely in USA and around the world. In fact cosmetics has turned the same way as pharmaceutical has been turning a trillion dollar industry where at most expertise is required and has to spend billions of dollar in terms of R&D to develop products which then can offer to customer after years of spending and efforts. Nature of Competition Currently, large cosmetic corporations combine to control over half of the cosmetics market. The table below lists each of the top 10 companies in 2006 and their respective shares of the global cosmetics market (retail sales value). Market Share for Top 10 Global Cosmetics Companies 2008 Company Procter & Gamble Co L'Oral Group Unilever Group Colgate-Palmolive Co Este Lauder Cos Inc Avon Products Inc Beiersdorf AG 2008 C&T Sales ( millions) 18,360 15,011 10,264 5,783 5,313 4,801 4,327 Share 12.7% 10.1% 7.1% 4.0% 3.9% 3.3% 3.1%

Johnson & Johnson Inc Shiseido Co Ltd Kao Corp

4,048 4,314 3,235

2.8% 2.6% 2.5%

Holding a position as one of the top 10 manufacturers is enviable, however, these companies understand that they must constantly reconsider and reevaluate their market positions by listening to the demands of their customers, gaining footholds in new markets, and evaluating their organizational structures. These large multinational firms are finding themselves facing stiff competition from other popular brands. Other cosmetics companies are pushing ahead, trying to gain their own place in the market, and have largely been successful in developing their own name. In the last fiscal year, several of these companies saw similar or greater rates of growth in their product lines compared to those in the top 10. The cosmetics industry exists in a market structure called monopolistic competition. The industry is characterized by a large number of firms that attempt to differentiate their products and maintain a certain degree of control over their pricing. In general monopolistic competition is characterized by relatively low barriers to entry and exit. Government regulation (mostly related to differences in the approach to safety issues) and distribution channels appear to be the most significant barriers to entry in the cosmetics industry. EU cosmetics companies have had little success in penetrating the market in Japan and China. Regulatory barriers may have been an issue for EU firms in the past however the accessibility of the Japanese cosmetics market has greatly improved since it was Executive Summary - November 2007 6 deregulated. Deregulation included the abolition of premarket approval, the establishment of a prohibited ingredient list similar to the EU and the abolition of the designated ingredient list. Despite the 2001 simplification of the regulatory framework, cosmetics can potentially be classified as quasi-drugs (e.g. deodorants, mouth wash) or drugs, making it more difficult for companies to export to Japan. This category generally requires pre-market approval and is subject to limitations on composition and manufacturing processes. In China the regulation of cosmetics is complex, involving two separate government bodies. There are differences in requirements between imported and domestically-produced cosmetics. Furthermore, the overall approach is not aligned with that of the EU or any other main regulatory model. Burdensome regulations increase the cost of business and take time. Cosmetics legislation in China is currently under review, and may be subject to considerable change in the near future. Distribution channels play a very important role in the cosmetic market. Consumers pay great attention when choosing the channels according to the type of product that they are seeking. In the EU they fall under four main categories: mass distribution, specialized distribution, pharmacy sales and direct sales. Channels are very similar across EU countries and somewhat similar in the United States. They operated quite differently in Japan and this difference forms the most significant trade barrier. The retail sector in Japan underwent considerable changes during the 1990s eliminating some of the inefficient practices that previously made it difficult for foreign retailers to sell to Japanese consumers. More recently, imports share of the market has been trending steadily higher. Barriers to trade from the market's structure appear to be more limited in China as cosmetics imports (especially from France) have been expanding rapidly

Industries Where Avon Products, Inc. Competes

Personal Care Products Manufacturing Consumer Products Manufacturing Apparel Manufacturing Jewelry & Watch Manufacturing Cosmetics & Skin Care Products Manufacturing Fragrance Manufacturing

How AVON case is it duplicated another competitor strategy of AVON?

There are plenty of examples in cosmetics industry where Avon case is repeating the same story of going global from USA due to the challenging nature of USA cosmetics industry. Avon has adopted door to door direct selling method from the day one and this has proved its competitive advantage too in terms of getting customers perfectly and make them satisfy with efficiently and personal attention of Avon Ladies around the world. The numerous examples can be names and few of those are as follows; 1. Herbalife International

It is a global nutrition, weight-loss and skin-care company. The company was founded in 1980 and it employs around 4,000 people worldwide. Herbalife reported net sales of USD 2.7 billion in 2010 and its corporate headquarters are in Los Angeles, US. The company distributes its products in 76 countries through a network of approximately 2.1 million independent distributors, some of whom earn profit on product sales and additional commission from a MLM compensation structure.

2.

Advocare

This is a nutrition, weight-loss and skin-care company. The company was founded in 1993 by Charles Ragus and employs around 247 people in the United States. In a statement, AdvoCare claims net sales of USD under 100 million in 2009 and its corporate headquarters are in Plano, TX,USA.

The company distributes its products in the United States through a network of approximately 50,000 independent distributors, some of whom earn profit on product sales and additional commission from a multi-level marketing (MLM) compensation structure. The company slogan is, "We Build Champions."

3..

Nu Skin Enterprises (NYSE: NUS) is an American multi-level marketing company that develops and distributes personal care products

and nutritional supplements that are sold under the Nu Skin and Pharmanex brands.[3] Nu Skin was founded in 1984 in Provo, Utah as Nu Skin International. The company began its first actual international operation in Canada in 1990, and in 1996 the company listed on the New York Stock Exchange. Initially only the Nu Skin Asia Pacific company was listed; however, shortly afterward all remaining company affiliates were sold to the new entity and Nu Skin Enterprises became a fully fledged public company.

Following a 1994 investigation by the Federal Trade Commission (FTC), the company paid $1 million and signed a consent decreeprohibiting it from making deceptive or unsubstantiated claims about its products.[4] In 1997, the company paid an additional $1.5 million to the FTC to settle ongoing allegations of unsubstantiated promotional claims.[5]

In 2010, the company reported its highest ever earnings with US$1.54 billion in revenue in 51 international markets.[2] As of 2011, Nu Skin operates in 51 countries in North America, Europe, and Asia.[6]

4.

AdvoCare International, L.P. is a nutrition, weight-loss and skin-care company. The company was founded in 1993 by Charles Ragus

and employs around 247 people in the United States. In a statement, AdvoCare claims net sales of USD under 100 million in 2009[1] and its corporate headquarters are in Plano, TX,USA.

The company distributes its products in the United States through a network of approximately 50,000 independent distributors, some of whom earn profit on product sales and additional commission from a multi-level marketing (MLM) compensation structure. The company slogan is, "We Build Champions."

5. Amway is a direct selling company and manufacturer that uses network marketing to sell a variety of products, primarily in the health, beauty, and home care markets. Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales growth of 9.5%, reaching US$9.2 billion for the year ending December 31, 2010

In 1959, Amway launched a business model fueled through the power of relationships. The original product offered in this model, was Liquid Organic Cleaner (L.O.C.). It was the first concentrated, bio-degradable, and environmentally friendly cleaning product. Since then, Amway has expanded from home products to a global leader in the categories of health and beauty. In 1959, Rich DeVos and Jay Van Andel founded Amway Corporation. Says Rich DeVos, We were just two guys from Ada, Michigan, USA who wanted to have a business of our own. We were two kids (it still feels like that sometimes) who were hungry for success and who wanted to give others the chance to be in business for themselves, too. Our late founder, Jay Van Andel, said of the company, Amway gets people into a new life of excitement, promise, profit, and hope. Amway now operates in over 80 countries and territories around the world.

Artistry is a brand of skin care and colour cosmetics, produced by Access Business Group and marketed by Amway in more than 90 countries and territories worldwide. Access, Quixtar, and Amway are part of the Alticor group of companies. Euromonitor International, a researcher and publisher of market reports, business reference books and online information databases, independently categorises Artistry as a prestige brand and ranks Artistry as one of the top five in sales in this category, alongside Clinique, Este Lauder, Lancme, andChanel.[1][dead link][2] Artistry is the only direct sales brand classified in the "prestige" category.[citation needed]

Artistry was launched in 1968 as a product line of skincare under the Nutrilite brand and continues to utilise Nutrilite research and technology, including patented Nutrilite extracts which are organically grown. [3][dead link]

As of 2000, the Artistry range included over 400 products.[4]

Up to and including 2004, Ingrid Vandebosch of Belgium was known to be the face of Artistry.[5] She was followed in 2005 by Canadian model Kim Tyo.[6]

In 2005, Amway introduced Artistry's two sister brands NAO Cosmetics and Eddie Funkhouser. These brands are targeted to a younger audience, with NAO Cosmetics available in North America and Eddie Funkhouser in other Amway markets. Amway ceased marketing these brands in 2010.

In May 2007, it was announced by Skate Canada and Quixtar that Artistry Cosmetics would be the official skin care and cosmetics sponsor for Skate Canada events and the Skate Canada national team.]

In 2008, Alticor announced actress Sandra Bullock as "the face" of Artistry Creme LuXury.[9]

In 2010, Artistry and Amway became sponsors of the Miss America competition, with the winner taking the role of Artistry spokesperson.[10]

The Artistry Essentials skincare line won AmeriStars 2007 Package Competition in the category of Health & Beauty Aids[11] Artistry Crme Luxury (also known Crme L/X) won theSkin Care Prestige category in the International Package Design Awards (IPDA) in 2008 and was nominated as a finalist in the Best New Skincare Product of the Yearcategory for the 2009 UK Beauty Awards. Q.4 Social, Economical and Demographic factor that effect on AVON market Strategy?

Avon direct sales strategy was hit in USA in late last century when US women started working full time. They were not present and were interested to work part time too for door to door sale. This may be Economic and social reason at the same time as it changed the way US women used to work and social atmosphere of USA and family culture too and has ultimate affect over economic of those customer who started earning more by working full time. But this was proved wrong in early this decade where recession made more people vulnerable and started direct sale again. Avon went global and acquired brand names of those who they worked with regionally. It has hit Avon marketing too. Similarly Avon price products on geographical basis for different countries. It proved devastating when neighboring countries import same products on less contributes to less profit for Avon. Avon has gain significant name in working with United Nation where encouraging and appreciating women in any business world. Yong entrepreneurs and young women leaders were encouraged by Avon during International Women Day. It attracts more and more women from developing world towards Avon. Avon marketing strategy was hit hard in China when they prohibit house to house selling and Avon started independent stores and beauty centres in shopping malls which changed the way of selling Avon products in China and hit business hard.