Avon Case Study
Although Avon Products, Inc. is the world's largest direct-selling organization and beauty product merchandiser, the company must strategize to maintain its number one position in the future. With operations in 143 countries divided into 53 markets and 4 regions (North America, Latin America, the Pacific, and Europe), Avon is a global company that needs to develop a long-term, global strategy. However, since sales performance, demographics, and culture are so different in their regions, Avon should also have a regional strategy that is in line with its global one.
Avon's direct selling method is extremely successful in most developing countries; ironically, Avon is declining in the region where it first experienced success - North America. The reality is that the external environment, namely culture and demographics, of North America has changed so much that direct selling, door-to-door, is not an optimal distribution channel. Avon's target consumers, women, are increasingly working outside the home; therefore, many times when salespersons rings the doorbell, nobody will answer.
Also, the US population is increasing mobile, meaning that both customers and salespersons are moving more frequently, which makes it difficult to establish a loyal, stable customer base.
Avon should benchmark the competition in North America, analyze the best practices, and restrategize to follow suit. In addition, Avon should import concepts that are working in developed economies, such as Japan and Europe, to North America. My recommendation for Avon in North America is that Avon should strengthen its retail shop division based on the positive financial data given from 1999-2001, which shows that net sales in North American retail stores has increased from 3.4, to 8.5 and then to 13.9 million. I applaud Avon's alliance with JC Penny and suggest that Avon consider other marketing intermediaries because marketing intermediaries specialize in promoting, selling, and...