A project by: HD Consulting Stephanie Hammond and Denise DiLissio.
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Transcript of A project by: HD Consulting Stephanie Hammond and Denise DiLissio.
A project by: HD ConsultingStephanie Hammond and Denise DiLissio
This is the company that knows the value of a perfect lip, but still opens its mouth
and Speaks Out against Domestic Violence.
BEAUTY
Video QuizWhat is the name of the foundation featured?
Avon Foundation for Women
What are the two causes spoken about?Breast cancer and violence against women *now includes global emergency relief*
What celebrities spoke about Avon?Christy Turlington, Patrick Dempsey, Reese Witherspoon, Melissa Ethridge
How much had the foundation raised by the airing of this video?800 million dollars
What was the foundation’s goal by 2012?1 billion dollars *they raised 910 million*
Executive SummaryAvon is a global manufacturer and marketer of beauty and related products.
Avon was founded in 1886 by David McConnell.
Avon is headquartered in New York, NY.
Avon employs approximately 42,000 employees.
Avon has 6 million+ active independentsales representatives.
Executive SummaryAvon's mission is focused on six core aspirations the company continually strives toachieve:
Leader in global beauty
Women's choice for buying
Premier direct-selling company
Most admired company
Best place to work
To have the largest foundation dedicated to women's causes: Be a committed global champion for the health and well-being of womenthrough philanthropic efforts, with a focus on breast cancer, domesticviolence and women's empowerment.
1886Mrs. P.F.E. Albee a 50 year old housewife becomes the first sales representative
1895CPC opens manufacturing headquarters in Suffern, New York
1914Company expands internationally
1920Sales top $1 million for the first time
1939California Perfume Company is renamed AVON
1932Company moves from a monthly campaign to a three-week selling cycle and reduces prices on specific products for each campaign.
1886Avon is founded as the California Perfume Company by David H. McConnell
1928CPC uses AVON name on everyday products
1902California Perfume Company has 10,000 representatives
Timeline
1948Sales surpass $21 million
1953Avon’s first television advertising is launched
1957The number of Avon Representatives grows to 100,000, with the company breaking the $100-million sales mark
1972Sales reach $1 billion
1954The “Ding Dong, Avon Calling” campaign launches and runs through 1967
1955Avon starts the Avon Foundation in the U.S.
1978The number of Representatives reaches one million and sales top $2 billion
1996Avon is the world’s first beauty company to launch an e-commerce site
1999Avon names its first female CEO: Andrea Jung
Timeline2001Avon launches its beComing line in J.C. Penney Stores; the venture ends in 2003
2003Avon launches mark., its brand for young women
2005Avon announces first restructuring
2006Avon wins first direct selling license in China
2008Avon has more than $10 billion in sales
2011Company says it is under investigation by the SEC for FCPA violations; announces the company is beginning search to replace Jung as CEO
2011AVON CELEBRATES 125 YEARS OF EMPOWERING WOMEN
Timeline2009Avon has more than 6 million Representatives;Management says it will restructure again
2012Avon names new CEO: Sheri McCoy
2012
Avon receives an unsolicited takeover bid from fragrance company Coty
2008Avon says a whistleblower alleges violations in China of the Foreign Corrupt Practices Act
Initiates cost savings plan to stabilize the company
2012
Marketing AnalysisThrough the eyes of the consumer
5 P’s of Marketing
Brand Strategies
Social Media Marketing
Perceptual Map
Brand Prism
Survey/Focus Group - Conducted with 10 women ages 29-72
What do you think Avon’s biggest strength is?A lot of products to offerWell known brandBeen around long timeBuying onlineProducts/priceQuality and price of productsCustomers are very loyal
What do you think Avon’s greatest downfall is?Not enough reps in areaNot marketing towards the younger crowdOld company – people think of Avon for older peopleToo much novelty productsProbably most think its their mother’s productsLack of advertising or not as muchCatalog sales only
5 P’s of MarketingProduct
Price
Promotion
Place
Potential Reps
Product
• Makeup• Skincare
• Fashion• Home
• Bath & Body• Fragrance
•Hair Care• Jewelry
• Children• Men
Price• From $0.99 to $60.00 for products
• Average cost of catalogs = $20/month for representatives• Samples and door bags are an extra cost for representatives
• Avon charges representatives $0.37 per customer that you have
Promotion
• Individual direct selling• Catalog distribution
• Samples
Place• Direct selling from Avon representatives
• Online option from Avon• Online directly from representative*
• Brick and mortar stores
Potential Representatives
• Avon’s greatest asset• Word of mouth
• Immediate sign up on website
Brand Strategy
3 Pillars of Avon• Women Empowerment, Sustainability, Philanthropy
Global Brand• Operates in over 100 countries with over 6 million active representatives• Latin America is top selling region followed by Europe, Middle East and Africa• North America comes in third
Red Ocean and Blue Ocean Strategy• Originally 100% Blue Ocean as they created new market space and were a game changer, but now has competition• If more than one representative are within close proximity of each other, it is red ocean strategy between them
Central Route to Persuasion• Initial purchases require more thought as you have to consciously find a representative (in person) to make a purchase
Multi-segment Strategy• Mass marketing – no differentiation in how products are offered• Offers many different types of products in a wide price range• Offers products to women, children and men
Relationship Marketing• Encourages lifelong relationships between representatives and their customers, and therefore, with Avon
Social Media Analysis
1.1 million likes on main
page
Showcases wide range of products
Vibrant & engaging
equaling many picture shares
Multiple pages for different
countries
Over 51 thousand followers
Moderate amount of retweets
Vibrant & engaging
Posts daily
Over 76 thousand followers
Only five recommendation
s
A plethora of information
Over 35,000 employees linked
Over seven thousand followers
Avon seller videos as well
Beauty tips and behind the
scenes
Over 931 thousand video
views
Luxu
ryAffordable
Sexy
Conservative
Brand Prism
What*Color cosmetics, skincare, fragrance, fashion and home products*Direct Selling*Sherry McCoy*Empowering Women*Sustainability*Philanthropy*“The Avon Lady”
WhenEveryday UseSeasonal PurchasesPlanned Purchases
Against WhomAnimal TestersMary KayMasculine MenDomestic Violence Offenders Mercenaries
For WhomWomen 16 & upLow Middle and Middle Class IncomesRecession Conscious womenRelationship/Consultation SeekerEntrepreneurial Go-GettersStay-at-home MomsFeministsActivists
Financials
Beauty; 72%
Home; 10%
Fashion; 18%
Financials
Financials
Billi
ons
Financials
Mill
ions
Brand Difficulties
Avon has lost it’s magic throughout the years because of technology.They were the first beauty company to launch an e-commerce site (1996).Online selling takes away from its heart. “Ding dong, Avon calling.”Inconsistent social media strategies.Signs of brand confusion.
Avon’s global ambassador and Honorary Chair for the Foundation for Women, Reese Witherspoon, has had some recent bad press.
She is the face of the Avon breast cancer walks in North America.Avon needs a celebrity that embodies natural beauty that is enhanced by Avon products, and is wholesome in the eyes of the consumer.
Avon’s reputation has been tarnished and leadership is unprovenAvon is being investigated to determine if they paid bribes in China and other countriesAvon predicts they will incur a loss (pay substantial fines)
Avon shareholders sued Avon for not acting in their best interest
Coty offered to acquire Avon for $10.7 billion, or $24.75 a share
At the time of the offer, Avon shares were $20.96 a share, giving the company a market value of about $9 billion
Significant decline in sales force of representativesNumber of active representatives declined 8% to about 420,000Too much pressure on current representatives to find new ones.Nickel and diming representatives.
Survey results to “Why do you no longer purchase from Avon?”Friend stopped dealingNo reps in areaOut of sight out of mindDon’t have seller close byNot easily accessible
Recommendations
Enhance Reputation, Ethics Programs and Training
Externally - Rebuild image through advertising that builds on the image of AVON that is well-known for empowering women
Internally - Avon enhance their ethics and compliance program and expand their compliance-related training to ensure employees understand the program and the importance of compliance take out
Convince Shareholders the Decision Not to Sell was Considered
Build trust with their own shareholders through their performance that helps to grow the business
Leadership needs to prove itself
Stop trying to be what they are not and focus on their roots. They were successful when they sold door to door. These face to face relationships touched peoples hearts.
Survey results to “How can Avon boost its visibility or gain you as a customer?”More samples, advertise more, have home partiesNew campaign to bring younger generations inSell in storesSomehow market to youngerOnline directlyMore marketing onlineMake it easier to purchase, walk out with same day purchaseTarget younger generation, available in retail stores
Increase overall Brand PresenceThis would be a strategic re-launch of the why Avon began
Market to those that want a personal experience with shopping that technology has strayed away from
Launch a commercial campaign to gain more representativesThis increases brand awareness for the Avon nameUse You Tube, Vimeo and other video sites to post tips for repsPublicize the good that the Avon Foundation for Women does
Have a more consistent and persistent social media strategyHave representatives be the “eyes and ears” of the companyAvoid brand image confusion, by continuing to emphasize what Avon is known for
http://youtu.be/45IwGho9xc4
Revamp rules for the representativesRequire a number/name of representative when ordering onlineStop nickel and diming
Incentivize representatives who continually increase sales or have a higher than average rate by giving them catalogs and samplesDo not charge the customer fee when that customer consistently orders from that representative over the span of two years
Encourage blue ocean marketing strategy by seeking out areas (zip codes) where representatives do not exist
Design a program for zip codes that currently have multiple representatives so that the competitiveness does not overshadow the Avon name
INVITE, INSPIRE, INFORM
Celebrity pair with Taylor Swift.Taylor Swift is a hub for followers.Gain more North American exposure.Gain more younger buyers.Partner with current Avon spokeswoman, Salma Hayek.
Factoids
Globally, 4 Avon lipsticks
and 2 Avon mascaras are sold every second.
Avon has 90% brand recognition in most major markets around the world
Avon is the largest corporate supporter focused solely on
women’s issues across the globe.
Avon is one of only a handful of companies to have been on the
Fortune 500 list every year since the list’s inception
200+ scientists andtechnicians work on every
breakthrough
Research Citations• http://usatoday30.usatoday.com/money/business/story/2012/09/14/sec-ends-one-avon-investigation-bribery-probe-continues/57781852/1• http://www.avoncompany.com/• http://investor.avoncompany.com/phoenix.zhtml?c=90402&p=irol-reportsannual• http://investor.avoncompany.com/phoenix.zhtml?c=90402&p=irol-reportsAnnualArchive• http://www.bloomberg.com/news/2012-05-10/coty-raises-offer-to-acquire-avon-products-to-24-75-a-share.html• http://books.google.com/books?id=bZUPceXxVP4C&pg=PT22&dq=Gertrude+Recordon+facial+treatment&hl=en&sa=X&ei=jjR5UaOiNMeY0QGK8IH
AAQ&ved=0CDwQ6AEwAA#
• http://www.forbes.com/sites/jennagoudreau/2013/02/27/new-avon-ceo-vows-to-restore-126-year-old-beauty-company-to-former-glory/• http://www.happi.com/issues/2013-03/view_breaking-news/a-challenging-year-for-avon/• http://www.theglobeandmail.com/globe-investor/shares-soar-as-struggling-avon-reverses-sales-decline/article8501182/• http://www.wharton.universia.net/index.cfm?fa=viewfeature&id=2230&language=english• http://seekingalpha.com/article/1174971-avon-products-management-discusses-q4-2012-results-earnings-call-transcript?page=3• http://usatoday30.usatoday.com/money/business/story/2012/09/14/sec-ends-one-avon-investigation-bribery-probe-continues/57781852/1• http://www.pbs.org/wnet/moneyshow/cover/090701.html• http://www.myquitamlawsuit.com/index.aspx?id=news_avonfcpaviolations• http://www.fcpa-worldcompliance.com/pdf/avon-article.pdf• http://dealbook.nytimes.com/2012/04/02/behind-cotys-bid-for-avon-a-complicated-story/• http://www.interbrand.com/en/BestRetailBrands/2013/Best-Retail-Brands.aspx• http://www.avonfoundation.org/foundation/financials/• http://www.prtm.com/uploadedfiles/books/avon_gets_its_supply_chain_makeover.pdf• http://wiki.answers.com/Q/Why_not_lay_off_Avon_lady_and_buy_the_products_by_internet• http://voices.yahoo.com/surprising-things-consider-becoming-215669.html• http://www.greatbeautybuys.com/about/12-facts-about-avon/• http://www.reuters.com/article/2012/03/16/us-avon-idUSBRE82F0VN20120316• http://www.thebeautycompany.co/downloads/Beyer_BeautyNumbers.pdf• http://www.sephora.com• http://www.aloette.com• http://www.marykay.com• http://www.loreal.com• http://www.clinique.com• http://www.maccosmetics.com• http://arbonne.com
• http://ladyloveavoncosmetics.wordpress.com/• http://ladyloveavoncosmetics.wordpress.com/• http://www.guardian.co.uk/business/2012/may/11/avon-ding-dong-battle-coty• http://www.ca.avon.com/PRSuite/supercurlacious_mascara.page• http://www.luvavon.co.uk/FAQ.html• http://www.bloomberg.com/news/2012-05-10/coty-raises-offer-to-acquire-avon-products-to-24-75-a-share.html• http://www.theadmag.co/avon/avon-skin-care• http://sweetiesfreebies.com/free-avon-anew-1-piece-skin-care-kit-first-15000• http://www.bargainmoose.ca/tag/avon/page/2/• https://www.facebook.com/AvonbyCindyTorres?group_id=0• http://www.theperfumegirl.com/perfumes/fragrances/avon/fergie-outspoken-intense/• http://eseagren.avonrepresentative.com/blog/index.html?blog_postid=1372543• http://madamedeals.com/wp-content/uploads/2012/06/Avon.jpg• http://bigwebpages.com/members/wordsmith/becoming.jpg• http://business-ethics.com/wp-content/uploads/2010/03/Bribe_IS-150x150.jpg• http://www.bing.com/images/search?q=avon+wins+direct+selling+license+in+China&qs=n&form=QBIR&pq=avon+wins+direct+selling+license+in+china&sc=0-3
2&sp=-1&sk=#view=detail&id=B8D38690D9C362B4D0E344C2D244F6F07249CD6C&selectedIndex=5• http://celebbabylaundry.com/wp-content/uploads/2013/04/gwyneth-paltrow-most-beautiful-women.jpg• http://www.avonfoundation.org/• http://therobinreport.com/tags/beauty/• http://avonsgdealer.blogspot.com/• http://www.pinktruth.com/2011/10/i-didn%E2%80%99t-do-it-the-%E2%80%9Cright-way%E2%80%9D-in-mary-kay/• http://www.rspo.org/en/member/707• http://wildmorrealty.com/avon-distribution-center-up-for-grabs/• http://blog.pointroll.com/trend_watch/trend-watch-twitter-turns-seven-facebooks-lookalike-audiences-youtube-has-one-billion-monthly-u/• http://www.prconversations.com/index.php/2011/08/using-twitter-for-pr-events/• http://blog.neosusa.com/2011/10/72-6-of-internet-users-will-shop-online-this-year-how-do-you-prefer-to-shop/christmas-shopping-online-l/• http://9to5google.com/category/youtube/• http://cindysavonboutique.com/buy-Avon.html• http://janeymay79.hubpages.com/hub/Hi-I-am-the-Avon-Mark-lady-ask-me-for-a-brochure• http://www.stylebistro.com/lookbook/Taylor+Swift/qJh_sqdmUme/Beauty• http://www.fanpop.com/clubs/selena-gomez/images/32789074/title/adidas-photo
Image and Video Citations