1. Industry Changes Cosmetic market is very saturated with competition Recently the market has been experiencing a modest growth rate and this trend will continue into the future In 2004 cosmetic sales= 6 billion dollars

2. Industry Changes Between 2000 -2010 the number of women aged 35-64 is expected to grow by 30% Because of this statistic manufacturers are placing a greater emphasis on foundations that contain anti-aging components

3. Industry The major driving force for the continual growth of makeup and cosmetic sales is the growing population of women Females outnumber males in society today and this trend will continue into the future

4. Traditionally skin manufacturers have been dealing with beauty from the outside but now they are promoting products that consumers ingest that can help their skin look and feel healthier Certain compounds when digested help your skin regenerate and look better

5. Companies are trying to combine inner and external beauty products For Example= Olay Vitamins made a partnership with Pharmavite Corporation Avon developed a new product line called Wellness

6. Marketing Strategies In 2003 Avon introduced the new product line Mark Mark consists of over 300 exclusive products including cosmetics, skincare, fragrances and accessories such as jewelry and handbags Makeup you can buy and sell Named in celebration of young women making their “Mark” on the world

7. Mark Product Line Mark is sold through a magalog Published every 4 to 6 weeks Published in Spanish and English Large distribution base=7 million copies distributed to young women each month

8. Mark representatives earn 40% commission on the sale of beauty products and jewelry Earn a 25% commission on the sale of all watches and accessories Mark offers you the opportunity to be the CEO of your own business In 2004 Mark achieved net sales of 47 million

9. M Catalog In 2004 Avon broke a 118 year old tradition and launched it’s first ever Men’s catalog called the M catalog Offers 16 pages of men’s grooming products and accessories Avon is trying to cash in on the growing metro-sexual trend

10. Avon is targeting men to broaden their customer base and get into a new market Avon has 2 product lines for men –1) Targets the career man –2) Targets the athlete

11. Avon.com was one of the first direct selling companies to venture online in 1997 The initial website was very restricted and limited working with a budget of only $400,000 little advertising and effort were put into the initial website

12. Avon.com take II By the end of 1998, Avon began to realize the tremendous potential and opportunities that the Web truly had to offer for the company Edwards was hired to become to new president and general manager of the new and improved Avon.com Web strategy

13. B2B vs. B2C 4 Key criteria to consider: Commissions Marketing Products Shipping

14. New and Improved They came up with a compromise, by incorporating a little of both B2B and B2C into the website They designed a way for their representatives to place customer orders online Still provided for direct-to-customer sales which is the bread and butter for Avon

15. Avon finally settled on an updated version of the website to suit all of the company’s needs for about $5 million This allowed transactions to go faster, which means they could sell more, and have the products shipped to the customer’s door faster than they ever could.

16. Financial Since 1999 Avon.com has shown great financial growth Entered many new direct investment markets In 1999, net sales and net income increased Same trend in 2000

17. Financial Cont’d. In 2001, overall sales were $5.95 billion In 2002 launched new product line to attract younger customers 2003 and 2004 numbers were more of the same –Earnings per share grew 25% –Cash flow from operations rose to $745 million –Sales increased to $7.7 billion

18. Financial Cont’d. 3 years in a row, earnings per share increased by more than 20% Sales have increased by nearly $2.5 billion since 1999 Cash flow from operations is nearly double what it was in 1999

19. International Expansion http://www.avoncompany.com/women/worl d.htmlhttp://www.avoncompany.com/women/worl d.html Over 120 countries on all continents –http://www.avoncompany.com/about/history.ht mlhttp://www.avoncompany.com/about/history.ht ml Kiss Goodbye to Breast Cancer campaign The largest women’s running event in Germany

20. International Expansion Countries overseas could not understand the United States slogan. Avon.com moved too fast into international expansion

21. International Expansion Financial gains: –Europe has made $1 billion –70% increase in Russia’s sales, they are expected to double their sales to $800 million To keep things moving smoothly, Avon is going to continue with their philanthropic towards Breast Cancer and domestic violence against women; send out US resources

22. Any Questions?