AVON: The Leading Company for Women - Research Paper Example

?AVON: The Leading Company for Women INTRODUCTION Women are the epitome of beauty, whether naturally or artificially done. By artificially we mean application of different beauty products either to enhance an already beautiful face and body or transform one from an ugly duckling to a beautiful swan. Marketing products to this specific clientele needs a lot of planning, preparation and strategy. There are companies that provide beauty products and AVON is one of them. AVON is a leading company for women. How this company emerged as successful is a point worth to examine. AVON and Marketing Concept Marketing is a process and marketing process for the marketing managers is the “performance of business activities that directs the flow of goods or services from producer to consumers or users to satisfy their wants and needs.” 1 Marketing products has evolved into four stages: the first stage was production oriented. The second stage was the sales stage. The third stage is focused on marketing concept 2 and the fourth stage is social responsibility and human orientation stage. Marketing concept states that a firm should have its basic objective the satisfactions of consumer wants. In order to accomplish this objective, marketing managers try to identify what consumers want and then produce the goods that will satisfy these wants. 3 Examining the history of the Avon company would lead us to the very purpose of its creation, which is to empower women to run her own business, which at the time, it was unheard of. The very first product to market is the perfume. And the very first step of marketing the product was through a sales representative. The target market: the women. This what Avon Company had done. It has identified its market, which are the women consumers. Then identified what the women want and produce them. When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. While this expanded sales department structure can be found in some companies today, many firms have structured themselves into marketing organizations having a company-wide customer focus. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing problem" - everybody must be concerned with customer satisfaction. 4 With Avon, to sell the products, the company has engaged in hiring sales representatives. These sales representatives sell the products directly to the consumer. Direct selling is a type of sales channel, where products are marketed directly to customers, eliminating the need for middlemen – wholesalers, advertisers and retailers. Direct selling can be conducted one-on-one, in a group or party format, or online. At Avon, the “direct” part of direct selling also refers to the personal component of this sales channel; it’s about building relationships with people and offering them a high level of service and personal attention.5 Retailers and wholesalers are middlemen who play an integral role in the marketing channel of distribution. A middleman is the intermediate agent who performs the marketing functions in the channel of distribution between the manufacturer and the ultimate consumer. 6 By eliminating them and engaging in direct selling, Avon Company has saved a lot of money and those engaged in selling the products invest minimum capital and obtain a good deal of profits from the products. Sales representatives of Avon Company pursue a single level marketing. The direct sales definition of this level of marketing is simple. A direct seller buys products from the parent company and sells them directly to his or her customers. Home-based business people have been pursuing single level marketing for years. 7 To move the products from producer to consumer, Avon marketing managers had ensure that certain marketing functions are performed. These include the following: selling, physical distribution, storage, market information and risk bearing. Avon Company in selling the products was not only concerned in making sales but made sure that the buyer or consumer is satisfied with the product and making the women-consumers aware of the products through advertisement and even sales promotion. To directly sell the products to the women consumers, the products were sold and advertised in the brochure and products that are available for the month are reflected in the brochure of the month. Keeping large stocks of merchandise in inventory involves some risk.8 In order to avoid spoilt and expired beauty products, the company sells them through promotional sales in the brochure. There are products that are available for the month and which are not the following month. And since the sales representatives are also women and at the same time they are also the consumers, they know whether a certain product is effective or not. In this way, the company can easily monitor what products are appealing and effective. Thus, avoiding production of less marketable ones. For 125 years in business 9 selling products that cater the needs of women, Avon has been successful in marketing its products. It has evolved as an institution for women. By identifying the market where to sell its products, no doubt it is considered as a leading company for women. Marketing its products is no longer a burden for this company. Now, the company is not only engaged in personal direct sale through a sale representative that go house to house, but it also has an online store where consumers from all parts of the world can purchase. Pricing, which is one basic element of marketing mix was taken seriously by the Company. Every physical needs of women have been addressed by the Avon Company. Women from all walks of life subscribe to its products. From lingerie to facial products to weight loss, hair and body beauty products to kitchen utensils and so on, the company has it all. In fact, even some of men’s apparel and underwear are being produced and sold by the company through its brochure- a medium of exchange and transaction. Exchange is the “act of obtaining a desired product by offering something in return. It takes place if all of the following conditions are complied: (a) Two parties should be there (b) Each party must have something of value to the other (c) Each party is capable of communication & delivery (d) Each party is free to accept or reject the offer (e) Each party believes that it is appropriate to deal with the other party. 10 All of these conditions were met by Avon Company in dealing with its product to the women populace. Avon has a three-level sales force. On the first level is the franchise manager who number more than a thousand nationwide. Their job is to recruit, train, and motivate the next line, the franchise dealer. There are over 200,000 franchise dealers coming in every month to purchase. Some of these franchise dealers have a network below them called certified beauty consultant. (CBCs) who are recruited by the more successful franchise dealers. On last estimate, there are about two million of these CBCs but they are not registered with Avon unlike the franchise managers and dealers.11 Marketing managers in large and small business must develop a marketing strategy to move goods from where they are produced to the consumers or final users of goods. Marketing strategy consists of two parts: First, to identify the market segment that is the target group of customers to whom the firm wishes to appeal. A decision must be made regarding the marketing mix. The marketing mix, which consists of the marketing strategy that will be followed to satisfy the wants and desires of the customers identified in the market segment involves decision making in four areas: product, price, distribution and promotion. 12 With Avon, all of these concepts have been playing a key role in the expansion and growth of the company. Avon promotes its products in the old days by door-to-door sales. However, as the company expands so is the strategy of promoting the products. In the present time, Avon Company promotes its products by word of mouth, advertisement in their websites and TV, print and magazine ads, through sales consultants and its sales representatives who are independent. It has also employed famous personalities such as Reese Witherspoon. It also promotes its products through an intricate distribution channel. The sales representatives of Avon is called the Avon Lady which have brought beauty to every household, from door-to door sales to online selling. However, the preferred method of Avon is through the Avon Lady, its sales representative. Avon has been successful through out the years and around the world using the same person-to-person selling method and increasingly sells the same core Avon products. 13 All departments within Avon are geared towards supporting its one of a kind operation: with marketing, advertising, product development and manufacturing all designed to support the company’s quick-spin selling cycle. 14 Advertising is an important component of marketing strategy. The aim is to promote your business and communicate the information you want to send to your intended audience, usually with the aim of increasing sales or making your audience aware of your products or services.15 At Avon Company, this plays an important role in its promotional strategy. It is successful in persuading its target market-the women, to buy its products. Its slogan: Avon the leading company for women, has indeed won the hearts of women all over the world as shown by the company’s growing branches in different parts of the globe. Personal selling is also a vital part of Avon Company’s marketing strategy. It is the means by which customers are reached on a face-to face basis. Sales representatives of the company are effective because they have adequate knowledge of the products they sell and the policies of the company. The sales representatives are regarded as the company’s powerful distribution channel. 16 AVON and the Law of Demand Law of demand means that as the price or good or service decreases, the quantity people want to buy increases and vice versa. 17 The word demand under this law has a specific meaning. People desire a lot of things but they cannot always buy them because they do not have enough money. It means that people are actually willing to and able to buy the item at the given price. 18 Avon Company had understood the meaning of demand. It has applied this term in pricing the products. This is the reason why it never runs out of clientele. Even an ordinary housewife can avail of the products. And even the lowliest in life can buy Avon products. For example, if the product such as underwear or brassiere is on sale or sold at a discounted price, women will buy them and as such, the stock or the supply immediately lasts. This means profit and success. The women-consumers reaction to items placed on sale is Avon’s way to test reality of the law of demand. According to Wolken 19 items are placed on sale for a variety of reasons. A sale may be used to attract additional customers to the store. Or a particular item may not have sold as well as it was expected to, resulting in a large inventory piled up in the stockroom. Conclusion Marketing Managers of Avon company had given equal weight to each marketing terms. As a result, women-customer needs and wants were duly addressed and catered. Avon Company is not only successful because of direct selling. It is successful because the marketing managers know what are the viable and exploitable marketing concepts applicable to the company. They have gained expertise on each marketing concept that each introduction of a new product in the market is always a success. Aside from that, the research and development area of the company was given an equally important attention with regards to preserving nature. It has undergone not only three phases of marketing development but 4 stages which is social responsibility and human orientation stage, with emphasis on the needs of women. Thus, looking at the 125 years existence of this company engaged in direct selling, there is no doubt that it is the leading company for women and will continue to evolve and develop to further cater the growing and complex needs and wants of the target clientele. And even though it has its own website for online customers, it has still encourage direct selling because of the interaction between the Avon lady and the customer. Indeed, its independent sales representatives are truly effective channel for distribution. Although the company had undergone business reverses in the previous years, those mistakes are attributed not to the misplaced understanding of different marketing concepts but due to internal structures and organizational system of its branches worldwide. Despite the business reverses, direct selling, as its primary form of distribution was not largely affected. And when these reverses were overcome by overhauling the internal structures of the Company, Avon emerged as one of the successful companies in direct selling and engaging in single level marketing. REFERENCES BOOKS Pickle, H.B and Abrahamson, R.L., Introduction to Business 5th Edition, (1983) Scott, Foresman and Company, Glenview, Illinois, pp.232-235, 254 Wolken L and Glocker J, “The law of Demand”, Invitation to Economics (1982) Scott, Foresman and Company, Glenview, Illinois p. 78 and p. 94 WEBSITES with Authors Klepacki, LA, “Avon: building the world’s premiere company for women”, Retrieved from: http://books.google.com.ph/books?id=ZAIqlTX1GIEC&pg=PA205&lpg=PA205&dq=how+company+promotes+avon+products&source=bl&ots=R9abO4cU_m&sig=7cSKDU7g8B0yZ1UhsFu4cd-arDM&hl=en&ei=Q8-TdL2NIKmugP4hbmNBw&sa=X&oi=book_result&ct=result&resnum=13&ved=0CHsQ6AEwDA#v=onepage&q=how%20company%20promotes%20avon%20products&f=false WEBSITES without Authors What is Marketing, Available at Scribd website, [Accessed on April 23, 2011], website: http://www.scribd.com/doc/16604553/Basic-Concepts-of-Marketing Avon Cosmetic Dealer and Direct Selling, Available at Philippine Franchise Directory of Business Opportunities Website, [Accessed on April 23, 2011], website: http://phfranchise.com/avon-cosmetics-dealer-and-direct-selling/ Advertising: the Basic, Available at Business Link Website, [Accessed: April 23, 2011], website: http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073902778 Direct Sales Definition of Direct Selling Opportunities, Available at Your Home Based Ideas Website, [Accessed: April 23, 2011], website: http://www.your-home-based-business-ideas.com/directsalesdefinition.html Avon Official Website, [Accessed on April 23, 2011], Retrieved at: http://www.avon.com The Marketing Concept, Available at NetMBA Business Knowledge Center Website, Accessed on April 23, 2011, Website: http://www.netmba.com/marketing/concept/ Read More