A project by: HD ConsultingStephanie Hammond and Denise DiLissio

This is the company that knows the value of a perfect lip, but still opens its mouth

and Speaks Out against Domestic Violence.

BEAUTY

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=NURriGqAUyFmbM&tbnid=hasHoLpUWPZhqM:&ved=&url=http://hip2save.com/2011/03/01/enter-to-win-1-of-15000-avon-anew-skin-care-kits/&ei=H2NtUfPNBo-24APsroCICA&bvm=bv.45175338,d.dmg&psig=AFQjCNHNcualb8UHQdUVQUmmO499o41Bng&ust=1366209695326427

http://shop.avon.com/shop/assets/images/prod/PROD_5028905_XL.jpg

http://youtu.be/WYRd4jgvu6I

Take Notes!

Video QuizWhat is the name of the foundation featured?

Avon Foundation for Women

What are the two causes spoken about?Breast cancer and violence against women *now includes global emergency relief*

What celebrities spoke about Avon?Christy Turlington, Patrick Dempsey, Reese Witherspoon, Melissa Ethridge

How much had the foundation raised by the airing of this video?800 million dollars

What was the foundation’s goal by 2012?1 billion dollars *they raised 910 million*

Executive SummaryAvon is a global manufacturer and marketer of beauty and related products.

Avon was founded in 1886 by David McConnell.

Avon is headquartered in New York, NY.

Avon employs approximately 42,000 employees.

Avon has 6 million+ active independentsales representatives.

Executive SummaryAvon's mission is focused on six core aspirations the company continually strives toachieve:

Leader in global beauty

Women's choice for buying

Premier direct-selling company

Most admired company

Best place to work

To have the largest foundation dedicated to women's causes: Be a committed global champion for the health and well-being of womenthrough philanthropic efforts, with a focus on breast cancer, domesticviolence and women's empowerment.

1886Mrs. P.F.E. Albee a 50 year old housewife becomes the first sales representative

1895CPC opens manufacturing headquarters in Suffern, New York

1914Company expands internationally

1920Sales top $1 million for the first time

1939California Perfume Company is renamed AVON

1932Company moves from a monthly campaign to a three-week selling cycle and reduces prices on specific products for each campaign.

1886Avon is founded as the California Perfume Company by David H. McConnell

1928CPC uses AVON name on everyday products

1902California Perfume Company has 10,000 representatives

Timeline

1948Sales surpass $21 million

1953Avon’s first television advertising is launched

1957The number of Avon Representatives grows to 100,000, with the company breaking the $100-million sales mark

1972Sales reach $1 billion

1954The “Ding Dong, Avon Calling” campaign launches and runs through 1967

1955Avon starts the Avon Foundation in the U.S.

1978The number of Representatives reaches one million and sales top $2 billion

1996Avon is the world’s first beauty company to launch an e-commerce site

1999Avon names its first female CEO: Andrea Jung

Timeline2001Avon launches its beComing line in J.C. Penney Stores; the venture ends in 2003

2003Avon launches mark., its brand for young women

2005Avon announces first restructuring

2006Avon wins first direct selling license in China

2008Avon has more than $10 billion in sales

2011Company says it is under investigation by the SEC for FCPA violations; announces the company is beginning search to replace Jung as CEO

2011AVON CELEBRATES 125 YEARS OF EMPOWERING WOMEN

Timeline2009Avon has more than 6 million Representatives;Management says it will restructure again

2012Avon names new CEO: Sheri McCoy

2012

Avon receives an unsolicited takeover bid from fragrance company Coty

2008Avon says a whistleblower alleges violations in China of the Foreign Corrupt Practices Act

Initiates cost savings plan to stabilize the company

2012

Marketing AnalysisThrough the eyes of the consumer

5 P’s of Marketing

Brand Strategies

Social Media Marketing

Perceptual Map

Brand Prism

Survey/Focus Group - Conducted with 10 women ages 29-72

What do you think Avon’s biggest strength is?A lot of products to offerWell known brandBeen around long timeBuying onlineProducts/priceQuality and price of productsCustomers are very loyal

What do you think Avon’s greatest downfall is?Not enough reps in areaNot marketing towards the younger crowdOld company – people think of Avon for older peopleToo much novelty productsProbably most think its their mother’s productsLack of advertising or not as muchCatalog sales only

5 P’s of MarketingProduct

Price

Promotion

Place

Potential Reps

Product

• Makeup• Skincare

• Fashion• Home

• Bath & Body• Fragrance

•Hair Care• Jewelry

• Children• Men

Price• From $0.99 to $60.00 for products

• Average cost of catalogs = $20/month for representatives• Samples and door bags are an extra cost for representatives

• Avon charges representatives $0.37 per customer that you have

Promotion

• Individual direct selling• Catalog distribution

• Samples

Place• Direct selling from Avon representatives

• Online option from Avon• Online directly from representative*

• Brick and mortar stores

Potential Representatives

• Avon’s greatest asset• Word of mouth

• Immediate sign up on website

Brand Strategy

3 Pillars of Avon• Women Empowerment, Sustainability, Philanthropy

Global Brand• Operates in over 100 countries with over 6 million active representatives• Latin America is top selling region followed by Europe, Middle East and Africa• North America comes in third

Red Ocean and Blue Ocean Strategy• Originally 100% Blue Ocean as they created new market space and were a game changer, but now has competition• If more than one representative are within close proximity of each other, it is red ocean strategy between them

Central Route to Persuasion• Initial purchases require more thought as you have to consciously find a representative (in person) to make a purchase

Multi-segment Strategy• Mass marketing – no differentiation in how products are offered• Offers many different types of products in a wide price range• Offers products to women, children and men

Relationship Marketing• Encourages lifelong relationships between representatives and their customers, and therefore, with Avon

Social Media Analysis

1.1 million likes on main

page

Showcases wide range of products

Vibrant & engaging

equaling many picture shares

Multiple pages for different

countries

Over 51 thousand followers

Moderate amount of retweets

Vibrant & engaging

Posts daily

Over 76 thousand followers

Only five recommendation

s

A plethora of information

Over 35,000 employees linked

Over seven thousand followers

Avon seller videos as well

Beauty tips and behind the

scenes

Over 931 thousand video

views

Luxu

ryAffordable

Sexy

Conservative

Brand Prism

What*Color cosmetics, skincare, fragrance, fashion and home products*Direct Selling*Sherry McCoy*Empowering Women*Sustainability*Philanthropy*“The Avon Lady”

WhenEveryday UseSeasonal PurchasesPlanned Purchases

Against WhomAnimal TestersMary KayMasculine MenDomestic Violence Offenders Mercenaries

For WhomWomen 16 & upLow Middle and Middle Class IncomesRecession Conscious womenRelationship/Consultation SeekerEntrepreneurial Go-GettersStay-at-home MomsFeministsActivists

Financials

Beauty; 72%

Home; 10%

Fashion; 18%

Financials

Financials

Billi

ons

Financials

Mill

ions

Brand Difficulties

Avon has lost it’s magic throughout the years because of technology.They were the first beauty company to launch an e-commerce site (1996).Online selling takes away from its heart. “Ding dong, Avon calling.”Inconsistent social media strategies.Signs of brand confusion.

Avon’s global ambassador and Honorary Chair for the Foundation for Women, Reese Witherspoon, has had some recent bad press.

She is the face of the Avon breast cancer walks in North America.Avon needs a celebrity that embodies natural beauty that is enhanced by Avon products, and is wholesome in the eyes of the consumer.

Avon’s reputation has been tarnished and leadership is unprovenAvon is being investigated to determine if they paid bribes in China and other countriesAvon predicts they will incur a loss (pay substantial fines)

Avon shareholders sued Avon for not acting in their best interest

Coty offered to acquire Avon for $10.7 billion, or $24.75 a share

At the time of the offer, Avon shares were $20.96 a share, giving the company a market value of about $9 billion

Significant decline in sales force of representativesNumber of active representatives declined 8% to about 420,000Too much pressure on current representatives to find new ones.Nickel and diming representatives.

Survey results to “Why do you no longer purchase from Avon?”Friend stopped dealingNo reps in areaOut of sight out of mindDon’t have seller close byNot easily accessible

Recommendations

Enhance Reputation, Ethics Programs and Training

Externally - Rebuild image through advertising that builds on the image of AVON that is well-known for empowering women

Internally - Avon enhance their ethics and compliance program and expand their compliance-related training to ensure employees understand the program and the importance of compliance take out

Convince Shareholders the Decision Not to Sell was Considered

Build trust with their own shareholders through their performance that helps to grow the business

Leadership needs to prove itself

Stop trying to be what they are not and focus on their roots. They were successful when they sold door to door. These face to face relationships touched peoples hearts.

Survey results to “How can Avon boost its visibility or gain you as a customer?”More samples, advertise more, have home partiesNew campaign to bring younger generations inSell in storesSomehow market to youngerOnline directlyMore marketing onlineMake it easier to purchase, walk out with same day purchaseTarget younger generation, available in retail stores

Increase overall Brand PresenceThis would be a strategic re-launch of the why Avon began

Market to those that want a personal experience with shopping that technology has strayed away from

Launch a commercial campaign to gain more representativesThis increases brand awareness for the Avon nameUse You Tube, Vimeo and other video sites to post tips for repsPublicize the good that the Avon Foundation for Women does

Have a more consistent and persistent social media strategyHave representatives be the “eyes and ears” of the companyAvoid brand image confusion, by continuing to emphasize what Avon is known for

http://youtu.be/45IwGho9xc4

Revamp rules for the representativesRequire a number/name of representative when ordering onlineStop nickel and diming

Incentivize representatives who continually increase sales or have a higher than average rate by giving them catalogs and samplesDo not charge the customer fee when that customer consistently orders from that representative over the span of two years

Encourage blue ocean marketing strategy by seeking out areas (zip codes) where representatives do not exist

Design a program for zip codes that currently have multiple representatives so that the competitiveness does not overshadow the Avon name

INVITE, INSPIRE, INFORM

Celebrity pair with Taylor Swift.Taylor Swift is a hub for followers.Gain more North American exposure.Gain more younger buyers.Partner with current Avon spokeswoman, Salma Hayek.

Factoids

Globally, 4 Avon lipsticks

and 2 Avon mascaras are sold every second.

Avon has 90% brand recognition in most major markets around the world

Avon is the largest corporate supporter focused solely on

women’s issues across the globe.

Avon is one of only a handful of companies to have been on the

Fortune 500 list every year since the list’s inception

200+ scientists andtechnicians work on every

breakthrough

Questions/Comments

Research Citations• http://usatoday30.usatoday.com/money/business/story/2012/09/14/sec-ends-one-avon-investigation-bribery-probe-continues/57781852/1• http://www.avoncompany.com/• http://investor.avoncompany.com/phoenix.zhtml?c=90402&p=irol-reportsannual• http://investor.avoncompany.com/phoenix.zhtml?c=90402&p=irol-reportsAnnualArchive• http://www.bloomberg.com/news/2012-05-10/coty-raises-offer-to-acquire-avon-products-to-24-75-a-share.html• http://books.google.com/books?id=bZUPceXxVP4C&pg=PT22&dq=Gertrude+Recordon+facial+treatment&hl=en&sa=X&ei=jjR5UaOiNMeY0QGK8IH

AAQ&ved=0CDwQ6AEwAA#

• http://www.forbes.com/sites/jennagoudreau/2013/02/27/new-avon-ceo-vows-to-restore-126-year-old-beauty-company-to-former-glory/• http://www.happi.com/issues/2013-03/view_breaking-news/a-challenging-year-for-avon/• http://www.theglobeandmail.com/globe-investor/shares-soar-as-struggling-avon-reverses-sales-decline/article8501182/• http://www.wharton.universia.net/index.cfm?fa=viewfeature&id=2230&language=english• http://seekingalpha.com/article/1174971-avon-products-management-discusses-q4-2012-results-earnings-call-transcript?page=3• http://usatoday30.usatoday.com/money/business/story/2012/09/14/sec-ends-one-avon-investigation-bribery-probe-continues/57781852/1• http://www.pbs.org/wnet/moneyshow/cover/090701.html• http://www.myquitamlawsuit.com/index.aspx?id=news_avonfcpaviolations• http://www.fcpa-worldcompliance.com/pdf/avon-article.pdf• http://dealbook.nytimes.com/2012/04/02/behind-cotys-bid-for-avon-a-complicated-story/• http://www.interbrand.com/en/BestRetailBrands/2013/Best-Retail-Brands.aspx• http://www.avonfoundation.org/foundation/financials/• http://www.prtm.com/uploadedfiles/books/avon_gets_its_supply_chain_makeover.pdf• http://wiki.answers.com/Q/Why_not_lay_off_Avon_lady_and_buy_the_products_by_internet• http://voices.yahoo.com/surprising-things-consider-becoming-215669.html• http://www.greatbeautybuys.com/about/12-facts-about-avon/• http://www.reuters.com/article/2012/03/16/us-avon-idUSBRE82F0VN20120316• http://www.thebeautycompany.co/downloads/Beyer_BeautyNumbers.pdf• http://www.sephora.com• http://www.aloette.com• http://www.marykay.com• http://www.loreal.com• http://www.clinique.com• http://www.maccosmetics.com• http://arbonne.com

• http://ladyloveavoncosmetics.wordpress.com/• http://ladyloveavoncosmetics.wordpress.com/• http://www.guardian.co.uk/business/2012/may/11/avon-ding-dong-battle-coty• http://www.ca.avon.com/PRSuite/supercurlacious_mascara.page• http://www.luvavon.co.uk/FAQ.html• http://www.bloomberg.com/news/2012-05-10/coty-raises-offer-to-acquire-avon-products-to-24-75-a-share.html• http://www.theadmag.co/avon/avon-skin-care• http://sweetiesfreebies.com/free-avon-anew-1-piece-skin-care-kit-first-15000• http://www.bargainmoose.ca/tag/avon/page/2/• https://www.facebook.com/AvonbyCindyTorres?group_id=0• http://www.theperfumegirl.com/perfumes/fragrances/avon/fergie-outspoken-intense/• http://eseagren.avonrepresentative.com/blog/index.html?blog_postid=1372543• http://madamedeals.com/wp-content/uploads/2012/06/Avon.jpg• http://bigwebpages.com/members/wordsmith/becoming.jpg• http://business-ethics.com/wp-content/uploads/2010/03/Bribe_IS-150x150.jpg• http://www.bing.com/images/search?q=avon+wins+direct+selling+license+in+China&qs=n&form=QBIR&pq=avon+wins+direct+selling+license+in+china&sc=0-3

2&sp=-1&sk=#view=detail&id=B8D38690D9C362B4D0E344C2D244F6F07249CD6C&selectedIndex=5• http://celebbabylaundry.com/wp-content/uploads/2013/04/gwyneth-paltrow-most-beautiful-women.jpg• http://www.avonfoundation.org/• http://therobinreport.com/tags/beauty/• http://avonsgdealer.blogspot.com/• http://www.pinktruth.com/2011/10/i-didn%E2%80%99t-do-it-the-%E2%80%9Cright-way%E2%80%9D-in-mary-kay/• http://www.rspo.org/en/member/707• http://wildmorrealty.com/avon-distribution-center-up-for-grabs/• http://blog.pointroll.com/trend_watch/trend-watch-twitter-turns-seven-facebooks-lookalike-audiences-youtube-has-one-billion-monthly-u/• http://www.prconversations.com/index.php/2011/08/using-twitter-for-pr-events/• http://blog.neosusa.com/2011/10/72-6-of-internet-users-will-shop-online-this-year-how-do-you-prefer-to-shop/christmas-shopping-online-l/• http://9to5google.com/category/youtube/• http://cindysavonboutique.com/buy-Avon.html• http://janeymay79.hubpages.com/hub/Hi-I-am-the-Avon-Mark-lady-ask-me-for-a-brochure• http://www.stylebistro.com/lookbook/Taylor+Swift/qJh_sqdmUme/Beauty• http://www.fanpop.com/clubs/selena-gomez/images/32789074/title/adidas-photo

Image and Video Citations