2. Summary of the Case
• Thoughtful transformation of Avon
– Enhancing Avon’s image around the world
– Expanding the Avon brand into new markets
– Creating new products and new distribution channels
– Increasing growth in Avon’s core product line
– Enhancing the experience of the Avon representative
3. Summary of the Case
Avon.com
• Created in 1997
• Caters direct-to-consumer sales
• Solution for stranded customers
• Reasons for success
– representatives were addressed
– earned extra money through advertisement
4. Summary of the Case
New Distribution Channels
• International market
– retail selling
– Quelle shops in Germany (7000 stores)
– Avon-run beauty counters
• American market
– mall “kiosks” (50 in operation)
– franchised to representatives
– 90% of customers are 1st time buyers
5. Who is Avon’s Target Market?
• Women
– ages 30 - 40
– shops at the mall for beauty products
– willing to spend additional money for higher quality and prestige
– first time buyer
– average to high income
• Representatives
– full time employees of AVON
– purchase mall kiosk
– 12,000 leadership representatives
– trained through the Beauty Advisor program
6. Who is Avon’s Target Market?
American Market
Women Representatives
5 million- stranded 100,000 full-time reps
2.4 million- new customers 12,000 lead reps
3.6 million
total - 11 million customers 112,000 kiosk owners
German Market
Women Representatives
4 million Beauty Advisors
7. What is the potential for conflict?
Representatives
• Competition
• Conflict with new customers
• Benefits lead and fulltime representatives
• Loss of customers
• Delivery system becomes unattractive
8. What is the potential for conflict?
Current Customers
• Do not purchase beauty products in the mall
• May not frequent high end stores
• Loss of personal/familiar connection
• Higher price
9. What is the potential for conflict?
Potential Customers
• AVON brand name conflicts with the image of
high-end retail stores
• Current market is very competitive
• Will not see other products offered by AVON,
which makes up 40% of sales
• May work in international market
10. How is managing conflict in case (B)
different from case (A)?
Website Retail Stores
same target market 1st time buyers
same brand image new brand image
same distribution method loss of direct selling
less threatening for reps direct competition
11. Are there other strategies that would take advantage
of the Web without creating conflict?
• Create a new brand name
– NOVA (AVON spelled backwards)
– use as the website name
– high-end products, higher prices
– luxury car of beauty products
• Introduce NOVA to retail
– advertising campaign
– target market is women who would not
purchase AVON
12. Progress of Avon
•39 million representatives
• 1 billion transactions per year
•Website
•Kiosks
•AVON spa in New York
•Mall locations
•New brand for younger women
(Mark)
