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An Over View On Avon And Foreign Markets Marketing Essay

1414 words (6 pages) Essay in Marketing

5/12/16 Marketing Reference this

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II. Avon’s Market Orientation Approach

Avon’s international marketing strategies made the company successful entering the global markets, because they managed the different marketing orientation strategies succesfully in each country.

Product Orientation

Even though Avon’s main strategy for product orientation was efficient in the U.S.(Avon’s headquarter), company started manufacturing high quality in Canada. The main reason for changing company’s strategy was due to their passive sales in home country. They thought they could be more efficient and create global image through standardization. This helped the quality image while saving cost by using uniform ingredients and packaging.

Sales Orientation

Decision to enter international operation from Canada was made to help solve their passive promoting sales and the drop of competitive advantage they had over U.S. market. Selling domestically through their sales orientation strategy was very successful in Canada, because customers’ customs, traditions and characteristics were similar to the U.S. In addition, Avon was able to be notified by many customers in Canada without investing heavily on promotion because of continental connection between two countries. The product information was spilled over from U.S. to Canada. With the successful international operation in their second country, Avon now runs a new campaign abroad every four weeks with different special offers to help solve their fixed cost inflation in countries such as Colombia and Venezuela.

Customer

Avon only had a strong R&D center in U.S. but started to build local R&D centers globally to analyze and find out customers’ needs. To satisfy the different cultural demands worldwide, the company signed exclusive agreements with several universities worldwide. It helped Avon to develop and launch customer based product launches and their campaign of “Hello, Tomorrow”.

Strategic Marketing

Avon combined production, sales and customer orientations in order to adapt the company’s product domestically. Additionally, having marketing variation of their product brand name and launching new products targeting specific country helped stabilize their sales profit and global brand image. Both approaches solved the problems that occurred from past strategies that they have focused on using until the 20th century.

Social Marketing

To have a strong brand image and the social marketing effort Avon mainly focused women in worldwide. “Hellow Tomorrow” was their first global campaign to target their specific product sponsored by famous celebrities and sports stars. The company conducted the same campaign for each country (“Hellogreen, Tomorrow” in Korea, Canada, U.S., eg.). Campaigning to support women and their needs helped establish the idea of Avon as a must have item, especially in countries where they still have conflicts over women’s rights. Avon became the largest corporate donor to breast cancer research. Canada would be the most successful example for Avon’s involvement on breast cancer research and donation. Currently, Avon joined with local organization to help prevent women from violence and to treat the victimized women

III. Avon’s Distribution Strategys

Direct Selling

Since Avon’s foundation in 1886, it has been a leading cosmetics company in the United States. In particular, one of the key factors to success was its own distribution strategy which is selling products by salespersons, so called “Avon Ladies”. There are over 5.8 million Avon representatives internationally and they are still increasing in some countries such as Brazil or the Philippines. Even if direct selling has been the backbone of Avon’s success so far, there are several disadvantages, as well as advantages, in sticking to that distributional strategy in every country at this moment.

Advantage of Direct Selling

The most important strength of the direct selling would be cost-saving advantages. When a company sells products by sales representatives, it doesn’t have to pay a lot of cost to store and maintain the inventory. Also, direct selling can significantly reduce marketing cost by delegating most of the promotion to Avon ladies. These cost-saving advantages can lead Avon to have a strong competitive edge than competitors.

The second advantage of direct selling is a word-of-mouth marketing effect. A lot of researches have shown that face-to-face and word-of-mouth communication is often a important factor when customers make decisions: they tend to consider someone they know as a credible source of product information. [1] Therefore, word-of-mouth customers befriended with Avon ladies tend to show loyalty to brands or products.

Disadvantage of Direct Selling

The most evident drawback of direct selling is that customers can’t purchase products whenever, wherever they want since only sales representatives can supply products. People may just go to retail establishment to obtain products, thus, Avon can lose potential customers to competitors which have retail distribution channel.

Secondly, as more women enter into workforce, more houses are getting empty which means that opportunities to do door-to-door sales would be decreased. If customers (women in this case) are not in the house as they used to be, sales representatives might become useless. Besides, some of consumers may think that knocking the door to sell product is kind of privacy invasion. This is more salient characteristics of women in Europe than those in USA. Under this circumstance, Avon may not effectively take advantages of direct selling.

III. Competitive Advantages

Avon had competitive advantages on the market in terms of its brand and 4P. Firstly, Avon has set global image by emphasizing global brand. Avon built strong brand image by delivering customers with its consistent image globally. Though sometimes different language works as an obstacle, putting brand name in English and French gave customers premium image of the brand. Global branding also helped Avon to reduce cost by using same ingredients and packaging.

Avon had managed its strategies successfully and earned advantages among other competitors. They adapted their products to each local market by allowing each country to develop their own products. This enabled the company to take into accounts all the considerations they needed such as legal, cultural and economic issues. In terms of pricing, Avon used penetration strategy. Avon’s relatively cheap price drew more customer attention and even helped go through recession period [2] . Regarding consumer attitudes toward source of information, Avon mainly used push strategy. Through direct sale method, they could reduce costs on employment and advertising. However, Avon did not neglect pull strategy and advertised its brand image and product when needed.

The strategies mentioned above could be duplicated by other competitors with ease. However, it does not mean that followers would also get same success that Avon achieved. The reason why Avon’s strategy worked was based on analysis of each market. One could not say successful strategies in specific market would also be successful in other areas. Legal issues might arouse like it did in China or customer preference from each nation toward ad might be different which lead to various ads. Specific time and market largely influences whether strategy would be successful. Analysis of market and right use of strategy was the reason for Avon’s success regardless of competitors.

IV. Conclusion

Avon has been successfully leading beauty product industry by various corporate strategies. First of all, it expanded its brand and developed high-quality beauty products by investing significant amount of money in R&D center. Also, one of the core competencies of Avon is its unique distribution strategy-direct selling by Avon Ladies. Door-to-door sales were a great success and still generating a lot of profits internationally, however, Avon has faced obstacles to continue that strategy in some of the countries such as U.S or Europe. Therefore, Avon should adopt different strategy by continent depending on the situation. Currently, Avon is putting lots of efforts to improve women’s rights and aid women to achieve their potential through Avon Foundation for Women. Avon can increase brand recognition and improve its image by maintaining those activities for social causes, including “Hello Green Tomorrow” campaign. Since Avon is in a very competitive industry, it should not only maintain its core competency (direct selling) but also diversify its marketing methods catching up with rapid social changes worldwide.

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