Avon Calls on Foreign Markets - Essay Example

The brand name has also been changed according to needs, e.g. France. The logo appears on the Avon product. It uses celebrity in order to sell its products. Avon is for women and their needs. Foreign operation Avon was formed on 1886 and has changed its marketing strategy frequently. It did so in order to maintain its growth in the market (Alanfaya, 2006, p.1). Avon depends hugely on foreign markets .The reason was that since US market is full of retailers of beauty product there is no untapped market left where Avon can capture and increase its market share.

Thus Avon decided to operate on less competitive market. The domestic market of Avon depends on the US market. The market comprises of less than 5% of the world’s population. Socio and demographic changes Avon showed a declining trend in the US market in the 1990’s. The percentage of people using make up went down drastically from 92% to 88%. The decline affected the age group between 18 to 24 years of people. They are the people who would spend money on trying new products. Yet market share dropped by 4% in 1996.

One of the main reasons in the decline of demographic is the changing fashion (Dortch, 1997, p.1). Candace Corlett remarked that the youths like to look more natural. The growth in the cosmetic market is projected to grow for all age groups. From the above data, it can be analyzed that the US market is now growing. But Avon being a cosmetic organization, it is mostly preferred by women of all age group. The ratio of women is at a higher rate than males. This would prove to be beneficial for Avon as it’s mainly caters to women.

The age group of 15 to 65 years is also dominated by women. Therefore this change could affect Avon in a positive way and generate more sales in US (CIA, 2011). When it comes to socio economic changes, Avon has established itself as a big brand. Avon categories itself as a global brand and caters to millions of women worldwide. Out of every 5women 2 women uses Avon product. Thus the socioeconomic changes would affect the business of Avon. The better economic rate of the people more business it would be able to generate.

Global Recession The recession of 2008 did not affect much on the operation of Avon. But however if a recession hits again, the economy would experience a fall in real GDP which would lead to less spending of income. But Avon deals in cosmetic products and this industry is growing (Eucck, 2011). Customers demand more for a quality product and Avon is a brand which satisfies their needs. Avon’s strength lies on its direct sales. It provides recession proof employment. Thus a global recession would not affect the operation of Avon.

Competitive Advantage Avon competitive advantage is that it brings products to its customers through direct sales. When the china market banned direct sales, Avon sold its product through small shops and malls (Parker, 2005, p.256). Avon has come up with an advantage business model, during the period of unemployment and recession. It provides economic advantage for most women in the world. Avon gives a better customer service than other companies. It provides the best direct sales, thus it would not be easy for its competitors to overcome such a difference and overtake Avon.

It has got a wider geographic coverage. Avon is present globally; it is at a position where it can expand even more, which is also not possible for any of its competitors the product line is much more attractive than its