Introduction (1) California Perfume Company Founded in 1886 Founder was 28-year-old David McConnell
Introduction (2) I started in a space scarcely larger than an ordinary kitchen pantry. My ambition was to manufacture a line of goods superior to any other and take those goods through canvassing agents directly from the laboratory to the consumer.
David McConnell Introduction (3) First product was Little Dot Perfume Set Set of five fragrances: rose, lily-of-the-valley, violet, hyacinth and heliotrope. Introduction (4) McConnell based his business upon: Consumable products sold directly to consumers A network of sales agents he organized during the years he worked as book seller.
Introduction (5) First representative Mrs. P. F. E. Albee By the end of 1887 company had 12 representatives, selling 18 fragrances Soon after, CPC opened 3000-square-foot laboratory in Suffern, NY. Introduction (6) 1937 Mr. McConnell died His son David H. McConnell Jr. takes over 1939 companys name was changed to Avon Cosmetics Why Avon? To honor W. Shakespeare who once lived in Stratford-Upon-Avon, English Midlands. Introduction (7) Worlds largest direct seller of beauty and beauty- related products. $11.7 billion in annual revenues in 2009 (up 8% from 2008) 42,000 associates now serve valued customers in more than 100 countries worldwide. 5.8 million Avon sales representatives (help to reach millions of customers around the world) Avon is a publicly traded global company listed on the New York Stock Exchange Avon Cosmetics; Tara & Max 8 Avons Core Values Trust Respect Belief Humility Integrity Avon Cosmetics; Tara & Max 9 Avons Growth Vision Expanding into new geographical markets Bringing into them high-quality products Service more and more women
AVONS VISION: Be the company that best understands and satisfies the product, service and self-fulfillment needs of women globally. Avon Cosmetics; Tara & Max 10 Avons principles: To provide individuals an opportunity to earn in support of their well- being and happiness. To serve families throughout the world with products of the highest quality backed by a guarantee of satisfaction. To render a service to customers that is outstanding in its helpfulness and courtesy. To give full recognition to employees and Representatives, on whose contributions Avon depends. To share with others the rewards of growth and success. To meet fully the obligations of corporate citizenship by contributing to the well-being of society and the environment in which it functions. To maintain and cherish the friendly spirit of Avon.
Avon Cosmetics; Tara & Max 11 Companys goals Environment:
Reduce GHG emissions per unit by 10% Reduce energy consumption per unit by 10% Reduce water consumption per thousand units by 7% Zero environmental noncompliance incidents and fines Avon Cosmetics; Tara & Max 12 Companys goals Governance: Report the recipients and portion of Avon payments used for political contributions and expenditures Philanthropy: Exceed $1 billion in funds distributed by 2012 Supply Chain: Ensure consistent oversight of our entire global supply chain Workplace security and health: Introduce a comprehensive safety audit program Avon Cosmetics; Tara & Max 13 Cosmetics industry Cosmetic products are important consumer products with an essential role in everyone's life. Today's cosmetic market is driven by innovation including new colour pallets, treatments targeted to specific skin types and unique formulas concentrating on different needs. They need to improve products constantly in order to stay ahead in a highly competitive market where more choice and ever greater efficacy are expected by the consumer. Avon Cosmetics; Tara & Max 14 Cosmetics industry The European cosmetics industry is a world leader and dominant cosmetics exporter, a highly innovative sector and a significant employer in Europe. The EU's involvement concerns mainly the regulatory framework for market access, international trade relations and regulatory convergence, all aiming to ensure the highest level of consumer safety while promoting the innovation and the competitiveness of this sector. Avon Cosmetics; Tara & Max 15 Competition Procter & Gamble Co. Unilever NV Revlon, Inc.
which sold cosmetics and personal care products primarily through retail stores, were considered important competitors in the marketplace. Avon Cosmetics; Tara & Max 16 Avon market Avon Products, Inc. markets its products to women in well over 100 countries through over 5 million independent Avon Sales Representatives. They also target a younger market Avon Products Inc. launched a new beauty business aimed at teenage girls. (use teens to sell beauty products to other teens via direct selling, catalogs, and the Internet) Avon Cosmetics; Tara & Max 17 Avon Cosmetics; Tara & Max 18 Positioning Strategies With their renowned Avon Ladies sales force the company Avon Products (AVP) has positioned its self for continued global growth as the largest direct seller of cosmetics with 5 million independent sales representatives selling at homes and in the work place globally. Almost 70% of AVP top line sales come from outside the U.S. where the evolving tiered direct selling dynamic is a perfect fit for the foreign markets and their culture of entrepreneurialism. Avon Cosmetics; Tara & Max 19 Positioning strategies 2 main strategies to improve the operating margin through improvements in costing. Strategic Sourcing Initiative (SSI) Product Line Simplification (PLS) (streamlining the assortment in order to mitigate the annual $75 million charge in disposing of obsolete inventories and by offering an assortment of high volume, high margin products that are centrally sourced to take advantage of the economy of scale) The average consumer of this product has an equivalent, relative household income of < $40,000/year. This customer is highly sensitive to the changing prices of energy and any negative macro economic trends. Avon Cosmetics; Tara & Max 20 Product strategy Avon product line includes skin care, make up, fragrances for men and women, toiletries for bath, health care, personal care and sun care. The most successful product in Avon history is Anew Perfecting Complex for Face. Avon Cosmetics; Tara & Max 21 Avons Brands Avon color and beyond color Avon skincare, Anew and Skin solutions Avon bath and body Naturals and skin so soft Avon Hair care advance techniques Avon Wellness Avon fragnance Avon Mark Avon Cosmetics; Tara & Max 22 Product responsibility Avon pledge to deliver safe and effective products will always be our top priority Avon, is committed to selling products made of the highest quality ingredients and guarantees to its customers safety and satisfaction, starting with a 100 percent satisfaction guarantee. Avon products either meet or exceed the safety regulations in every country in which we operate. Avon Cosmetics; Tara & Max 23 Global Product Safety Standard The safety of every product must be substantiated prior to product introduction. We will be vigilant in monitoring the safety of our products in the hands of consumers. We will remove any ingredient from our cosmetic products should new evidence emerge that would no longer support its safe use.
Avon Cosmetics; Tara & Max 24 Avon Cosmetics; Tara & Max 25 Cosmetics Safety Evaluation Safety evaluation process includes following steps: Every ingredient must undergo a review of all available safety information, including scientific literature, by toxicologists All products are carefully formulated to ensure that they present no risk of contamination by microorganisms. Excluding risk of irritation Clinical testing Avons scientists participate all scientific organizations in order to follow new techniques.
Avon Cosmetics; Tara & Max 26 Products Public Perception Consumers can leave their questions and concerns www.cosmeticsinfo.org and they will receive immediate response. Website is developed by The Personal Care Product Council (PCPC) This website provides customer with all information about ingredients used in Avon. Avon Cosmetics; Tara & Max 27 Core, Actual and Augmented Product Example: Anew Perfecting Complex for Face Core product: Face cream Actual product: Nice, fancy pack Augmented product: Send your recommendations or complaints to Avon, www.cosmeticsinfo.org etc Avon Cosmetics; Tara & Max 28 Pricing Strategies Maximizing Sales Growth: Every day new representatives are beginning this business opportunity Maintain quality & services: Strict test on products (banned on animals) Representatives are close to the costumers Confidence in services + quick help when needed. Social objectives: 2 Associations: Avon Breast Cancer Crusade Against Domestic Violence program
Avon Cosmetics; Tara & Max 29 Distribution Strategy (1) Door-to-door selling principle Avon ladies Konsultantka, Vendeuse Independante, Sales dealer, Revendedora Advantages of buying Avon from Avon represetative: Personal relationship Friendly service Try samples before you buy product Beauty advisors
Avon Cosmetics; Tara & Max 30 Distribution Strategy (2): Buy Avon On-Line Many representatives in US have their own website www.youravon.com where customer can order Avon product 24/7 and still have product delivered for free Customers who still dont have their Avon lady can order Avon products on www.avon.com and have their products delivered by post. Avon Cosmetics; Tara & Max 31 Distribution Strategy (3): Buy Avon Everywhere Avon sells in more than 100 countries New channels for delivery are constantly created Depending on where you live you can buy Avon on Kiosks, beauty centers, boutiques and department stores (USA)
Avon Cosmetics; Tara & Max 32 Promotion Strategies Sales promotion: (marketing communication function that encourages action) Adding tangible value to brand offering, added value offer designed to encourage and accelerate a response. There are two basic sales promotions: Push strategies: marketing communication efforts targeted at members of the distribution channels Pull strategies: marketing communication effort targeted at end user. Avon is focusing more on pull strategies rather than push strategies. Avon Cosmetics; Tara & Max 33 Sales Promotion Premiums Discounts/price reductions Coupon codes Sampling Contest Loyalty promotions. Avon Cosmetics; Tara & Max 34 Conclusions & Recommendations Disadvantages: single channel distribution (only via internet or Avon representative) Avon is in sale in department stores only in US European or Asian customers dont have the opportunity to try product before buying unless given by Avon lady Recommendations: Introduce Avon products to department stores, pharmacies etc
Avon Cosmetics; Tara & Max 35 THANK YOU FOR YOUR ATTENTION !!!