Pass Papers Avon Case Study free essay sample

Avon emphasizes standardized products that carry its global brand, but allows product lines and brand names to vary by country if needed. In addition, each country operation sets its own prices to reflect local market conditions and strategic objectives. Whenever possible, Avon transfers organizational learning and successful practices from one country to another. [See Map 16. 1] QUESTIONS 1. The chapter describes different marketing orientations. Discuss the applicability of each to Avon’s international operations. The five common marketing orientations are production, sales, customer, strategic marketing, and social marketing. The production orientation does not apply to Avon. Initially when Avon entered its first foreign market, it went to nearby Canada probably focusing on a sales orientation with little product adaptation. Today, Avon utilizes aspects of customer, strategic marketing, and social marketing in its global strategy. Avon modifies its products to meet specific customers’ needs such as technology-driven skin care products in Japan and including insect repellent in the Brazilian skin cream. We will write a custom essay sample on Pass Papers Avon Case Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Avon modified its distribution method, particularly in China, as part of the overall strategic marketing orientation. Avon’s social marketing orientation is part of its global image supporting women and their needs. Specific programs include fighting breast cancer and domestic violence. 2. Why is Avon so much more dependent on its foreign operations than on its home (U. S. ) operations? Avon forecasted slow growth in the U. S. based on heavy competition. This is often why companies decide to go global. Avon also considered some changing socioeconomic trends that might impact their sales model. More women were working full time and direct selling models did not fit that lifestyle. Avon also recognized that less than 5% of the world’s population lives in the U. S. 3. Discuss socioeconomic and demographic changes that could affect Avon. In addition to the changing role of women in the workforce in the U. S. , Avon must evaluate each country’s availability of salespeople and customers. The availability of women who want to work part time in direct sales is a key trend for Avon’s sales force recruiting. Also, are women at home and available to meet with Avon representatives? The increase in the middle class, particularly in emerging markets, expands the potential customer base. All of these trends impact the way Avon goes to market. 4. How might a global recession, such as the one that began in 2008, impact Avon’s operations? Some Avon products are considered by women as essentials and they will continue to purchase these products even in difficult financial times. However, many products sold by Avon are categorized by their customers as nonessentials. As the family budget tightens, customers reduce their purchases of the nonessentials. As profit reduces for the company at large, global expansion might be scaled back or new product introduction might be delayed. Many companies are looking very hard at cost structures and making major modifications to maintain profit levels. 5. What are the major competitive advantages that Avon has? How easily might other companies duplicate these advantages? Avon has name recognition globally. They also have a global organization, not just sales, but product development and distribution. Avon has proven it can adjust its model to meet country-specific requirements specifically in China. Mary Kay Cosmetics has recently entered the Chinese market and has very similar models. Avon has also used brand marketing in its â€Å"Hello Tomorrow† campaign and uses celebrities when that ad strategy is attractive to their customers. Although costly all of these things can be imitated with the exception of the brand loyalty. 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 original reasons for direct sales still hold true, including cost savings through a smaller number of employees, low advertising budget, and not paying for shelf space in stores. These cost savings allow Avon to keep prices low. Another advantage is the relationships and loyalty that Avon ladies develop with their clientele. Cons do exist with this model. Customers cannot obtain products whenever they want to and returns do occur because of difficulty in matching colors in catalogs. As Avon attempts to go higher end, they cannot alienate their value-focused customers.