AVON CASE STUDY

Avon Case Study

Avon Case Study

When David McConnell founded his company, Avon was first known as the California Perfume Company. The company was named Avon in 1939, as a tribute to his favorite writer, William Shakespeare. As the first "Avon Lady", Mrs. P.F.E. Albee initiated the company's famous direct-selling method, and her name is still honored today in the company. Avon established itself as a household name in the Fifties and Sixties with a worldwide network of door-to-door sales-ladies. Today, Avon remains the world's largest direct seller of cosmetic products with operations in 143 countries through 4.4 million independent sales representatives. (Allen, 2001)

Since its beginnings, the firm has evolved enormously due to the influence of various microenvironmental actors and macroenvironmental forces. Not only do these factors shape Avon's domestic marketing strategy, but these environments also have a great importance in the firm's international activities. Furthermore, the company still has to improve specific aspects of its strategy if it wants to maintain its position on the American market and in its international activities. (Angeloglou, 2000)

Avon's marketing strategy in the U.S.A.

Since it's creation in 1886, Avon has gone through many changes in its marketing strategy. Throughout the years, Avon has tried to adjust its strategy in order to maintain/increase its market share within the USA. To do so, the firm had to take into consideration all the actors and forces of the American market. (Bundles, 2001)

The actors in the microenvironment

For Avon, the microenvironment is somewhat different than for a traditional firm. Indeed, since it sells its products through direct selling, there are no marketing intermediaries. This aspect gives the firm more freedom in putting its strategy in action. However, like all other companies, Avon must take into consideration the 4 other actors of their microenvironment. (Corson, 2002)

The company

For more than a century, the Avon company has been known for the direct-selling approach it uses to sell its cosmetics and toiletry products. In short, Avon employed women, called "Avon Ladies", to demonstrate products to customers in their own homes. (Castelbajac, 2005)

Avon started out as the California Perfume Company, when the company was founded in 1886 by David McConnell (1858-1937). By 2001, Avon was the world's largest direct-selling company, employing 3.4 million sales representatives in 139 countries around the world (2 percent of whom are male), and with total sales revenues of $5.7 billion. (Gavenas, 2002)

Marketing Intermediaries

Until the arrival of the internet and changes in customer needs, Avon never used marketing intermediaries. Its distribution strategy, direct selling, didn't require the use of intermediaries. However, 15% of the American population did not want to buy products through this channel, but also more women were working outside of their home. These factors led Avon to rethink its strategy and consider selling its products through retail outlets. (Gumpert, 2000)

Suppliers

Suppliers play in important role in Avon's strategy. They must be able distribute the firm's products all over the United States. Considering the size of Avon's pool of customers, the firm should make sure that they can deal with ...