Avon's Market Campaigns - Essay Example

 Avon's Market Campaigns Avon was founded in the year 1886 and considered to be one of the largest international manufacturers of cosmetics and other beauty care products. Avon focused more on global operations than local operations and implemented marketing strategies with a home country approach. Avon is currently operating worldwide and having sales operations in more than 66 countries and regions and distributions in further 44 countries. Avon is currently generating profits more from its global operations than local one. Avon's market campaigns always promoted itself as a company that cares about women and their beauty needs. As per Avon's global strategy it is imperative to sell directly to individual consumers and the product's brand names can be changed in accordance with the cultural environment of different countries but the global brand name will be their primary identification. Avon allows every branch or subsidiary to set its own competitive prices in response to their local market conditions and the inter-country transfer of learning, resources and practices. 1. Your reading assignment for this unit describes different marketing orientations. Discuss the applicability of each to Avon’s international operations. Production, sales, customer, strategic marketing, and social marketing are the most common marketing orientations. Avon uses a mix of customer, strategic marketing and social marketing orientations in its global marketing strategy. Avon is basically a customer oriented company which allows product modifications as per country-specific or customer-specific requirements. As a part of its social marketing campaign to support women, Avon started its social awareness programs like fighting against domestic violence and breast cancer. Avon also introduced insect-repellent skin creams in South American countries. The company also took an innovative step in its distribution method in China to appropriately implement its strategic marketing orientation. 2. Why is Avon so much more dependent on its foreign operations than on its home (U.S.) operations? The strategy of going global was based on a primary fact that there will be more chances of profitability if you could access more customers. The basic reason of exporting is to increase the profitability of business either to explore new markets or to get rid of local heavy competition. Avon had both. The selling model developed by Avon that is in accordance with the nature of their products is not much suitable for the women in United States. As a large number of women are engaged in full time jobs, it will be difficult to access them through direct selling model. 3. Discuss socioeconomic and demographic changes that could affect Avon. Avon has a specific sales model that is line with its business model and the nature of products it is selling. However in order to make the business profitable, it is necessary to understand the socioeconomic and demographic trends of the country. In United States, the availability of women is a major issue. Avon needs part time sales force to implement its sales model effectively with a low labor cost. The unavailability of women affects the volume of sales because there will be fewer candidates willing to take the part time sales representative job and also there will be fewer women to meet those representatives to buy the products. 4. How might a global recession, such as the one that began in 2008, impact Avon’s operations? Going global is a risky decision as the economic recession can affect the profitability of a global company more than a local company. Some portion of operating cost of global operations is fixed in nature and can not be avoided like legal formalities of each country. Global recession also affects the purchasing power of customers and they are now more focused on the usability of the products they purchased. In this situation, companies are focusing on modifying their business strategies to deliver products with more functions with an economic price in order to satisfy the consumer needs and increase their own share of profit at the same time. 5. What are the major competitive advantages that Avon has? How easily might other companies duplicate these advantages? Avon is a global company with distributed product development methods. The major competitive advantage of Avon is its country oriented marketing approach. As a global company, Avon has many advantages of having a distinct image and recognition through which the company has the power to access celebrities for its brand marketing that adds further value to the company's image. . 6. Avon does not sell within the United States in retail establishments (with the exception of kiosks handled by some of its reps). What are the pros and cons of distributing this way? The main reason of devising the direct selling model is cost effectiveness. By having direct sales system, the company gets the benefit of lower number of employees, low labor cost, low advertising cost and a personal interaction with their customers. The direct interaction with customers is very beneficial in brand building, transparency of feedback and the level of customer satisfaction. There are certain drawbacks of this model as well. The customers cannot buy their required items whenever they want that affects the level of profitability. 7. If you were advising Avon on the selection of new suppliers, what would be your major concerns as you evaluate firms that are potential suppliers? What criteria should the company use to make decisions on where to manufacture their products? Avon should focus on diversified suppliers, especially small businesses owned by women, in order to promote its products and corporate image both at the same time. The company has manufacturing plants in Germany and Poland and should focus on emerging markets where it can get labor at lower cost. 8. Identify the challenges Avon faces in both maintaining and expanding its global manufacturing and supply chain network given the dynamics of today’s competitive environment. The biggest challenge is Avon facing is to fight with the current economic recession that is affecting its profitability and it can be seen through a decrease in the net income of Avon during 2010 as compared to 2009. Another challenge is to enable its supply chain to meet the demands of every market in which Avon is in. References: Daniels, J.D, Radebaugh, L.H, Sullivan, D.P. (2010). International Business: Environments and Operations. Prentice Hall. Shoshanah, C, Roussel, J. (2005). Strategic supply chain management: the five disciplines for top performance. McGraw-Hill Professional. Avon Products. (2011, April 25). In Wikipedia, The Free Encyclopedia. Retrieved 21:44, April 26, 2011, from http://en.wikipedia.org/w/index.php?title=Avon_Products&oldid=425898456 Globalization. (2011, April 25). In Wikipedia, The Free Encyclopedia. Retrieved 21:48, April 26, 2011, from http://en.wikipedia.org/w/index.php?title=Globalization&oldid=425759373 Avon Products Inc. http://www.avoncompany.com/ Read More