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A project by: HD Consulting Stephanie Hammond and Denise DiLissio

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Presentation on theme: "A project by: HD Consulting Stephanie Hammond and Denise DiLissio"— Presentation transcript:

1 A project by: HD Consulting Stephanie Hammond and Denise DiLissio

2 This is the company that knows the value of a perfect lip, but still opens its mouth and Speaks Out against Domestic Violence. BEAUTY

3 Perfume bottles became collectibles

4 Perfume bottles became collectibles

5 Perfume bottles became collectibles

6 Take Notes!

7 Video Quiz Avon Foundation for Women
What 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*

8 Executive Summary Avon 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 independent sales representatives.

9 Executive Summary Leader in global beauty Women's choice for buying
Avon's mission is focused on six core aspirations the company continually strives to achieve: 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 women through philanthropic efforts, with a focus on breast cancer, domestic violence and women's empowerment.

10 Timeline 1886 Mrs. P.F.E. Albee a 50 year old housewife becomes the first sales representative 1902 California Perfume Company has 10,000 representatives 1953 Avon’s first television advertising is launched 1928 CPC uses AVON name on everyday products 1939 California Perfume Company is renamed AVON 1920 Sales top $1 million for the first time 1932 Company moves from a monthly campaign to a three-week selling cycle and reduces prices on specific products for each campaign. 1886 Avon is founded as the California Perfume Company by David H. McConnell 1948 Sales surpass $21 million 1895 CPC opens manufacturing headquarters in Suffern, New York 1914 Company expands internationally 2006 – Avon wins direct selling licesnse in China 2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops.

11 Timeline 1955 Avon starts the Avon Foundation in the U.S. 2001 Avon launches its beComing line in J.C. Penney Stores; the venture ends in 2003 2006 Avon wins first direct selling license in China 1996 Avon is the world’s first beauty company to launch an e-commerce site 2003 Avon launches mark., its brand for young women 1972 Sales reach $1 billion 1954 The “Ding Dong, Avon Calling” campaign launches and runs through 1967 1957 The number of Avon Representatives grows to 100,000, with the company breaking the $100-million sales mark 1978 The number of Representatives reaches one million and sales top $2 billion 1999 Avon names its first female CEO: Andrea Jung 2005 Avon announces first restructuring 2006 – Avon wins direct selling licesnse in China 2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops.

12 Timeline 2008 Avon says a whistleblower alleges violations in China of the Foreign Corrupt Practices Act 2009 Avon has more than 6 million Representatives; Management says it will restructure again 2011 AVON CELEBRATES 125 YEARS OF EMPOWERING WOMEN 2012 Avon names new CEO: Sheri McCoy Initiates cost savings plan to stabilize the company 2012 2012 Avon receives an unsolicited takeover bid from fragrance company Coty 2008 Avon has more than $10 billion in sales 2011 Company says it is under investigation by the SEC for FCPA violations; announces the company is beginning search to replace Jung as CEO 2006 – Avon wins direct selling licesnse in China 2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops.

13 Marketing Analysis Through the eyes of the consumer 5 P’s of Marketing
Brand Strategies Social Media Marketing Perceptual Map Brand Prism

14 Survey/Focus Group - Conducted with 10 women ages 29-72
What do you think Avon’s biggest strength is? A lot of products to offer Well known brand Been around long time Buying online Products/price Quality and price of products Customers are very loyal What do you think Avon’s greatest downfall is? Not enough reps in area Not marketing towards the younger crowd Old company – people think of Avon for older people Too much novelty products Probably most think its their mother’s products Lack of advertising or not as much Catalog sales only

15 5 P’s of Marketing

16 Product Makeup Skincare Bath & Body Fragrance Hair Care Jewelry
Fashion Home Children Men

17 Price Promotion Individual direct selling Catalog distribution Samples
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

18 Potential Representatives
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

19 Brand Strategy

20 3 Pillars of Avon Global Brand
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

21 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

22 Social Media Analysis

23 1.1 million likes on main page Multiple pages for different countries
Vibrant & engaging equaling many picture shares Showcases wide range of products

24 Over 51 thousand followers Posts daily
Moderate amount of retweets Vibrant & engaging

25 Over 76 thousand followers Over 35,000 employees linked
A plethora of information Only five recommendations

26 Over seven thousand followers Over 931 thousand video views
Beauty tips and behind the scenes Avon seller videos as well

27 Conservative Luxury Affordable Sexy

28 Brand Prism

29 What For Whom Against Whom When Animal Testers Everyday Use Mary Kay
*Color cosmetics, skincare, fragrance, fashion and home products *Direct Selling *Sherry McCoy *Empowering Women *Sustainability *Philanthropy *“The Avon Lady” For Whom Women 16 & up Low Middle and Middle Class Incomes Recession Conscious women Relationship/Consultation Seeker Entrepreneurial Go-Getters Stay-at-home Moms Feminists Activists Against Whom Animal Testers Mary Kay Masculine Men Domestic Violence Offenders Mercenaries When Everyday Use Seasonal Purchases Planned Purchases

30 Financials 2006 – Avon wins direct selling licesnse in China
2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops. In August, the company said its second-quarter net income fell 70%, hurt by the stronger dollar and lower global demand.

31 Financials 2006 – Avon wins direct selling licesnse in China
2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops. In August, the company said its second-quarter net income fell 70%, hurt by the stronger dollar and lower global demand.

32 Financials Billions 2006 – Avon wins direct selling licesnse in China
2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops. In August, the company said its second-quarter net income fell 70%, hurt by the stronger dollar and lower global demand.

33 Financials Millions 2006 – Avon wins direct selling licesnse in China
2007 – sales hit 2.62 billion. By 2008 sales hit 10 billion through acquisitions. Silpada jewelry and …… 2011 – Jung steps down as CEO but stays on as executive chairman citing her role in “motivating” the troops.

34 Brand Difficulties

35 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.

36 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.

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

38 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

39 Significant decline in sales force of representatives
Number of active representatives declined 8% to about 420,000 Too 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 dealing No reps in area Out of sight out of mind Don’t have seller close by Not easily accessible

40 Recommendations

41 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

42 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.

43 Survey results to “How can Avon boost its visibility or gain you as a customer?”
More samples, advertise more, have home parties New campaign to bring younger generations in Sell in stores Somehow market to younger Online directly More marketing online Make it easier to purchase, walk out with same day purchase Target younger generation, available in retail stores

44 Increase overall Brand Presence
This 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 representatives This increases brand awareness for the Avon name Use You Tube, Vimeo and other video sites to post tips for reps Publicize the good that the Avon Foundation for Women does Have a more consistent and persistent social media strategy Have representatives be the “eyes and ears” of the company Avoid brand image confusion, by continuing to emphasize what Avon is known for

45 Invite, Inspire, Inform Revamp rules for the representatives
Require a number/name of representative when ordering online Stop nickel and diming Incentivize representatives who continually increase sales or have a higher than average rate by giving them catalogs and samples Do 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

46 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.

47 Factoids 200+ scientists and breakthrough
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. Factoids 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 and technicians work on every breakthrough

48 Questions/Comments

49 Research Citations

50 Image and Video Citations
https://www.facebook.com/AvonbyCindyTorres?group_id=0


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