The Newest Avon Lady – Barbie!

The Newest Avon Lady – Barbie!

•      Agenda

•       Overview of Case

–     Primary Issue

•      Company (Micro Environment) à Strengths and Weaknesses

•      Changing Marketing Strategy of Avon

•      Other Micro/Macro Environment à Opportunities and Threats

•      Recommendations

–      Domestic Strategy Recommendations

–      International Strategy Recommendations

•      Takeaways

•      Overview

•       This case looks:

–      Problems that Avon has faced over 30 years in both its micro and macro environments

–      Company’s efforts to adjust their Marketing Strategy to cope with their changing environment

•      What is the primary issue of this case?

–     How best to formulate Avon’s Marketing Strategy to meet needs of changing consumers and employees

Strengths

•      Company History

–      Company Reputation

–      Brand Recognition

•      Market Research

–      Paying attention to market

–      Proactive or Reactive?

•      Sales Force

–      International Strength

–      History of being a Strength Domestically, but now?

Weaknesses

•      Marketing Strategy is unfocused

–      Products

–      Promotions

•      Sales Force

–      Turnover

–      Inability to serve customers

–      Alienation with Changes

•      Image

–      Your grandmother’s cosmetic company

Changing Marketing Strategy

 

–     Change #1:

–      Refocus product lines to core businesses

–      Price Cuts

–      “Leadership” bonuses for salespeople based on sales of people they recruit

•      Change #2:

•      Avon Select

–      Catalogue with toll-free number, designed for median age 38, hhld income > $45,000, extensive advertising, *less commissions and incentives, and executive layoffs

 

•      Change #3:

–      In Canada, introduced magazine “Confidante”, and new interactive kiosks

•      Change #4:

–      Switched to distribution through retail stores, *original strength was to avoid retail stores

–      Cut product line by 30%

–      Created global brands and standardized

Unfocussed Marketing Strategy

 

–      Dropping and adding products

–      Traditional strength in their sales force now they are alienated

–      Distribution channel conflicts

Opportunities

 

–      International Markets

–      Employees available internationally, best/better fit for company?

–      Shift to skin care products or health-care products?

–      Other Domestic Distribution Channels

–      More Distribution Partnerships with companies like Mattel

Threats

•      Demographics

–      Customers and salespeople moving

•      Competition

•      Customer

•      Economic

–      Working women not at home

–      Fewer p-t sales reps available

–      Income Distribution: Boomers

•      Political (China)

•      Cultural

•      Technology

•      Intermediaries

Domestic Marketing Strategy

 

•      Recommendations?

–      Consistency in Marketing Strategy

–      Better Positioning

–      Distinctive Product Line

–      Better Sales Force Incentives

–      Better Coordination of Distribution Channels to Minimize Conflict

–      Int’l Marketing Strategy

–       

•      Recommendations?

–      Stick with selling to Retailers in China à less risky

–      Expect to sell smaller volumes to many customers due to Economics of this country

–      Different Products to Appeal to this Market?

–      Develop more Partnerships with companies like Mattel

–      Takeaways

–       

–      Find a strategy and stick with it

–      Important to position a company (re: a target market) and have a focused strategy that flows from positioning

–      Always keep in mind the broader environment when formulating Marketing Strategy (anticipate changes)

–      Capitalize on opportunities in developing markets

–      May be a better fit with a company’s strengths

–      Keep in mind Sales force Availability

–      Economic, Political, and Cultural factors