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Cast Study of Avalon Cosmetics (fictional) data using SAS
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AVON/MARY KAY “KNOCK-OFF”› SELL MAKEUP/COSMETIC PRODUCTS
SALESWOMEN› WOMEN BUY A SALES-KIT› SELL DOOR-TO-DOOR
TRADITIONALLY HIGH PROFIT MARGIN
DECLINING REVENUE 3 STRAIGHT YEARS› NET SALES DECLINING YEARLY
DEFINITION OF CUSTOMER BASE› CHANGING OF THE CUSTOMER?
RECOMMENDATIONS - WHAT TO DO?
“IF THEY DON’T BUY FROM US THEY’RE BUYING FROM SOMEONE ELSE”› WOMEN WILL BUY COSMETICS
REGARDLESS AGE 27-44 NOT EMPLOYED “LOVE ATTENTION”
2004 CUSTOMER PURCHASE PRICE $11.05 # CONTACTS 1.94 TIME OF DAY (SALE) 1.5
› (1=MORNING, 2 = AFTERNOON, 3 = EVENING) EMPLOYED 0.26
› (1=EMPLOYED, 0=NOT EMPLOYED) AGE 34.53 YRS CHILDREN 2.17
2006 CUSTOMER PURCHASE PRICE $18.93 # CONTACTS 4.1 TIME OF DAY (SALE) 2.34
› (1=MORNING, 2=AFTERNOON, 3=EVENING) EMPLOYED 0.64
› (1=EMPLOYED, 0=NOT EMPLOYED) AGE 35.4 YRS CHILDREN 2.26
INCREASING YEARLY;› PURCHASE PRICE› EMPLOYMENT› NUMBER OF CONTACTS PRIOR TO SALES
VISIT› TIME OF DAY FOR A VISIT
YR 2006 > 2005 > 2004 ALL SIGNIFICANT MEAN YEARLY DIFFERENCES @ ALPHA LEVEL OF 0.05
TIME OF DAY OF A SALES VISIT› 3 (EVENING) > 1 (MORNING)
NUMBER OF CHILDREN› 0 >1=2=3=4
NUMBER OF CONTACTS PRIOR TO A SALES VISIT› 6=5>4=3=2>1
AS EMPLOYMENT ↑ CONTACTS ↑› KNOWING THAT, NEED TO REALIZE CUSTOMER-BASE IS
WORKING AND MAKE ATTEMPTS LATER IN THE DAY› LOWERING ATTEMPTS AND MAKING IT EASIER TO REACH A
WIDER CUSTOMER-BASE AS CONTACTS ↑ PURCHASE PRICE ↑…..BUT…
› THIS IS ONLY A RESULT OF AVALON ATTEMPTING TO CONTACT INCREASINGLY-EMPLOYED CUSTOMER-BASE
› EMPLOYMENT ≠ CORRELATE WITH PURCHASE PRICE…BUT….IT DOES CORRELATE WITH TIME OF DAY OF A SALES VISIT
› TIME OF DAY OF A SALES VISIT DOES CORRELATE W/ PURCHASE PRICE (MORE LIKELY TO BE EMPLOYED =LIKELY LATER TIME OF DAY ON AVERAGE OF SALES VISITS = HIGHER PURCHASE PRICE)
SUMMATION TARGET EMPLOYED CUSTOMERS TO :› WIDEN CUSTOMER BASE (INCREASING NET # OF SALES)
BY LOWERING NUMBER OF CONTACTS NEEDED (BECAUSE YOU NOW KNOW CUSTOMERS ARE EMPLOYED)
LESS CONTACTS NEEDED ALLOWS FOR ABILITY TO INTERACT W/ MORE CLIENTS
› FOCUS ON PURCHASE PRICE SALES BY TARGETING EMPLOYED CUSTOMERS AS EMPLOYMENT ↑ CONTACTS AND TIME OF DAY OF SALES
VISIT↑ AS TIME OF DAY OF SALES VISIT ↑PURCHASE PRICE ↑
(BECAUSE THESE WOMEN TEND TO BE WORKING AND HAVE MORE DISPOSABLE INCOME)
TARGET NEW, YOUNGER CUSTOMERS› LESS LIKELY TO HAVE FAMILIES› CUSTOMERS WITH 0 CHILDREN >
PURCHASE PRICE VS. CUSTOMERS WITH 4 CHILDREN
› WIDENS CUSTOMER-BASE
ADVERTISEMENTS SUGGESTED BY COMPANY CEO TO
ADVERTISE DURING DAYTIME TV/SOAP OPERAS› THIS IS NOT AN EFFECTIVE SOLUTION› WHY?
ON AVERAGE THE MAJORITY OF THE AVALON CUSTOMER BASE (64%) ARE EMPLOYED
ADVERTISE DURING LATE LOCAL NEWS OR NETWORK SITCOMS
OVERALL GOAL = WIDEN CUSTOMER-BASE› HOW?› ADVERTISING DURING LATER HOURS
CONDUCIVE TO EMPLOYED
› IMPROVED KNOWLEDGE OF CUSTOMER ADAPT TO THE EVOLVING AVALON CUSTOMER EMPLOYMENT IS GOING UP
LEADS TO: TIME OF DAY OF SALES ↑ AND NUMBER OF CONTACTS PRIOR TO SALES VISIT ↑
TIME OF DAY SALES ↑ LEADS TO PURCHASE PRICE ↑