Avon Final

Avon Cosmetics
By Tara Rovcanin and Maximilien Abrezol

Introduction (1)
California Perfume Company
Founded in 1886
Founder was 28-year-old David McConnell

Introduction (2)
I started in a space scarcely larger than an ordinary
kitchen pantry. My ambition was to manufacture a line
of goods superior to any other and take those goods
through canvassing agents directly from the laboratory
to the consumer.

David McConnell
Introduction (3)
First product was Little Dot Perfume Set
Set of five fragrances: rose, lily-of-the-valley, violet,
hyacinth and heliotrope.
Introduction (4)
McConnell based his business upon:
Consumable products sold directly to consumers
A network of sales agents he organized during the years he
worked as book seller.

Introduction (5)
First representative Mrs. P. F. E. Albee
By the end of 1887 company had 12
representatives, selling 18 fragrances
Soon after, CPC opened 3000-square-foot
laboratory in Suffern, NY.
Introduction (6)
1937 Mr. McConnell died
His son David H. McConnell Jr. takes over
1939 companys name was changed to Avon Cosmetics
Why Avon? To honor W. Shakespeare who once lived in
Stratford-Upon-Avon, English Midlands.
Introduction (7)
Worlds largest direct seller of beauty and beauty-
related products.
$11.7 billion in annual revenues in 2009 (up 8% from
2008)
42,000 associates now serve valued customers in more
than 100 countries worldwide.
5.8 million Avon sales representatives (help to reach
millions of customers around the world)
Avon is a publicly traded global company listed on the
New York Stock Exchange
Avon Cosmetics; Tara & Max
8
Avons Core Values
Trust
Respect
Belief
Humility
Integrity
9
Avons Growth Vision
Expanding into new geographical markets
Bringing into them high-quality products
Service more and more women

AVONS VISION:
Be the company that best understands and satisfies the
product, service and self-fulfillment needs of women
globally.
10
Avons principles:
To provide individuals an opportunity to earn in support of their well-
being and happiness.
To serve families throughout the world with products of the highest
quality backed by a guarantee of satisfaction.
To render a service to customers that is outstanding in its helpfulness
and courtesy.
To give full recognition to employees and Representatives, on whose
contributions Avon depends.
To share with others the rewards of growth and success.
To meet fully the obligations of corporate citizenship by contributing to
the well-being of society and the environment in which it functions.
To maintain and cherish the friendly spirit of Avon.

11
Companys goals
Environment:

Reduce GHG emissions per unit by 10%
Reduce energy consumption per unit by 10%
Reduce water consumption per thousand units by 7%
Zero environmental noncompliance incidents and fines
12
Companys goals
Governance:
Report the recipients and portion of Avon payments used for
political contributions and expenditures
Philanthropy:
Exceed $1 billion in funds distributed by 2012
Supply Chain:
Ensure consistent oversight of our entire global supply chain
Workplace security and health:
Introduce a comprehensive safety audit program
13
Cosmetics industry
Cosmetic products are important consumer products
with an essential role in everyone's life.
Today's cosmetic market is driven by innovation
including new colour pallets, treatments targeted to
specific skin types and unique formulas concentrating
on different needs.
They need to improve products constantly in order to
stay ahead in a highly competitive market where more
choice and ever greater efficacy are expected by the
consumer.
14
Cosmetics industry
The European cosmetics industry is a world leader and
dominant cosmetics exporter, a highly innovative sector
and a significant employer in Europe.
The EU's involvement concerns mainly the regulatory
framework for market access, international trade
relations and regulatory convergence, all aiming to
ensure the highest level of consumer safety while
promoting the innovation and the competitiveness of
this sector.
15
Competition
Procter & Gamble Co.
Unilever NV
Revlon, Inc.

which sold cosmetics and personal care products primarily
through retail stores, were considered important
competitors in the marketplace.
16
Avon market
Avon Products, Inc. markets its products to women in
well over 100 countries through over 5 million
independent Avon Sales Representatives.
They also target a younger market
Avon Products Inc. launched a new beauty business aimed
at teenage girls. (use teens to sell beauty products to other
teens via direct selling, catalogs, and the Internet)
17
18
Positioning Strategies
With their renowned Avon Ladies sales force the
company Avon Products (AVP) has positioned its self for
continued global growth as the largest direct seller of
cosmetics with 5 million independent sales
representatives selling at homes and in the work place
globally.
Almost 70% of AVP top line sales come from outside the
U.S. where the evolving tiered direct selling dynamic
is a perfect fit for the foreign markets and their culture
of entrepreneurialism.
19
Positioning strategies
2 main strategies to improve the operating margin through
improvements in costing.
Strategic Sourcing Initiative (SSI)
Product Line Simplification (PLS)
(streamlining the assortment in order to mitigate the annual
$75 million charge in disposing of obsolete inventories and by
offering an assortment of high volume, high margin products
that are centrally sourced to take advantage of the economy
of scale)
The average consumer of this product has an equivalent,
relative household income of < $40,000/year. This customer is
highly sensitive to the changing prices of energy and any
negative macro economic trends.
20
Product strategy
Avon product line includes skin care, make up,
fragrances for men and women, toiletries for bath,
health care, personal care and sun care.
The most successful product in Avon history is Anew
Perfecting Complex for Face.
21
Avons Brands
Avon color and beyond color
Avon skincare, Anew and Skin solutions
Avon bath and body Naturals and skin so soft
Avon Hair care advance techniques
Avon Wellness
Avon fragnance
Avon Mark
22
Product responsibility
Avon pledge to deliver safe and effective products will
always be our top priority
Avon, is committed to selling products made of the
highest quality ingredients and guarantees to its
customers safety and satisfaction, starting with a 100
percent satisfaction guarantee.
Avon products either meet or exceed the safety
regulations in every country in which we operate.
23
Global Product Safety Standard
The safety of every product must be substantiated prior
to product introduction. We will be vigilant in
monitoring the safety of our products in the hands of
consumers. We will remove any ingredient from our
cosmetic products should new evidence emerge that
would no longer support its safe use.

24
25
Cosmetics Safety Evaluation
Safety evaluation process includes following steps:
Every ingredient must undergo a review of all available
safety information, including scientific literature, by
toxicologists
All products are carefully formulated to ensure that they
present no risk of contamination by microorganisms.
Excluding risk of irritation
Clinical testing
Avons scientists participate all scientific organizations in
order to follow new techniques.

26
Products Public Perception
Consumers can leave their questions and concerns
www.cosmeticsinfo.org and they will receive immediate
response.
Website is developed by The Personal Care Product
Council (PCPC)
This website provides customer with all information
about ingredients used in Avon.
27
Core, Actual and Augmented Product
Example: Anew Perfecting Complex for Face
Core product: Face cream
Actual product: Nice, fancy pack
Augmented product: Send your recommendations or
complaints to Avon, www.cosmeticsinfo.org etc
28
Pricing Strategies
Maximizing Sales Growth:
Every day new representatives are beginning this business
opportunity
Maintain quality & services:
Strict test on products (banned on animals)
Representatives are close to the costumers Confidence in
services + quick help when needed.
Social objectives:
2 Associations:
Avon Breast Cancer Crusade
Against Domestic Violence program

29
Distribution Strategy (1)
Door-to-door selling principle
Avon ladies Konsultantka, Vendeuse Independante,
Sales dealer, Revendedora
Advantages of buying Avon from Avon represetative:
Personal relationship
Friendly service
Try samples before you buy product
Beauty advisors

30
Distribution Strategy (2):
Buy Avon On-Line
Many representatives in US have their own website
www.youravon.com where customer can order Avon
product 24/7 and still have product delivered for free
Customers who still dont have their Avon lady can order
Avon products on www.avon.com and have their
products delivered by post.
31
Distribution Strategy (3):
Buy Avon Everywhere
Avon sells in more than 100 countries
New channels for delivery are constantly created
Depending on where you live you can buy Avon on
Kiosks, beauty centers, boutiques and department
stores (USA)

32
Promotion Strategies
Sales promotion: (marketing communication function
that encourages action)
Adding tangible value to brand offering, added value offer
designed to encourage and accelerate a response.
There are two basic sales promotions:
Push strategies: marketing communication efforts targeted
at members of the distribution channels
Pull strategies: marketing communication effort targeted
at end user.
Avon is focusing more on pull strategies rather than
push strategies.
33
Sales Promotion
Premiums
Discounts/price reductions
Coupon codes
Sampling
Contest
Loyalty promotions.
34
Conclusions & Recommendations
Disadvantages:
single channel distribution (only via internet or Avon
representative)
Avon is in sale in department stores only in US
European or Asian customers dont have the opportunity to
try product before buying unless given by Avon lady
Recommendations:
Introduce Avon products to department stores, pharmacies
etc

35
THANK YOU FOR YOUR
ATTENTION !!!

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Avon Cosmetics

By Tara Rovcanin and Maximilien Abrezol

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