Avon.ComEssay Preview: Avon.ComReport this essayThe Avon brand is one of the leading cosmetics brands in the world. When it started in the late nineteenth century and throughout the middle of the twentieth, their target market was mostly housewives. Since it started as door-to-door selling, it is only logical that their consumers are the ones left at home. However, after much development in society and economy, with the progression of women, their target market also extended to working women.
Today, Avons products are designed to appeal to the mass market of women aged 25-50 with average to below-average household incomes. Through their representatives, they are able to reach millions of women, roughly 25 million in the United States alone. Direct Selling also allows them to keep the prices down, to be able to cater to average earning women and even below average ones.
Avons Direct Selling model is a good strategy for it not only differentiates them from their competitors; rather, it is one of the main reasons for their success. Their brand is the fifth largest beauty company overall with annual sales of over $5 billion dollars. When asked if Avon should sell directly to the consumers, the answer is yes, because it works for them.
Since other beauty companies rely on malls and stores for their sales, Avon directly goes to you whether you are in the office or in the comfort of your own home. And with this, the company is able to sell not just to the mall goers but almost to everyone in their target market having 500,000 sales representatives in the United States. The product goes directly to you.
By doing Direct Selling, Avon is able to lessen the costs in terms of rent and wages that a normal company utilizes for their sales in the mall or store. There are particularly no costs attributed to these factors. Another thing is that since the company relies on the sales representatives to make the orders during their selling cycles, they minimize inventory costs such as storage and warehousing.
Direct Selling mainly relies on the sales representative to conduct sales, so these sales representatives can easily sell to their families and friends at the start. And after trying out the product, they are sure to appreciate the quality of the products at the low price. These families and friends in turn may recommend to other people to buy, thus, expanding the network.
Basically, the business selling process of Avon is Direct Selling where in they recruit sales representatives who will be the one in charge of dealing with the customers directly. There are two types of sales representative profiles, those who sell part time and full time. Full time sales representatives are also called Presidents club members. There are also part-time sellers who are usually in their 30s and 40s who are also employed in other companies. Selling Avon products is just their second job. However, this is also an advantage because they are able to reach a new market, the working women, who can be easily tapped by these part time sellers.
All of the representatives are not employees of the company, thus they dont have to give them monthly salaries and other benefits. The sales representatives earn in proportion to what they are able to sell. Thus, these representatives use different styles and strategies to sell the Avon products. This is turn also contributes much to the advantage of Avon. Although, the problem with this is that since sales representatives are contracted, the turnover rates are high and since the customer lists are in the sales representative, once a representative leaves the selling business, she takes with her the customer list she owns. Avon has no way to trace who their end customers really are and take care of them in case they are “stranded.”
Avon’s customer list has been growing at a rate of about 6.1% a year since the beginning of 2015.
Since the introduction of a number of ‘self appointed’ company managers in many companies including some that do not pay for the employees’ expenses, it has taken a huge amount of effort to improve the sales management process in many companies by adding representatives to their payroll. Moreover, the new management team members do not have to follow the same code of conduct as current customers! The employees also have much more independence, which has caused them to perform better. The staff management team and the sales and marketing team as well as the sales and marketing staff are also able to be more flexible and the employees are able to take care of their own affairs and other social issues.
We want to make Avon a success with our customers; we want to be the main focus of the customer and we want to be a good presence in the store! This includes customers who do not yet have to pay. After all, one of the major issues Avon and its fans face for the company is if those customers do not pay to us when we collect their check! We want to provide customers with a better experience on our merchandise!
We also believe that this will give customers a better experience by giving them the best prices. Therefore, many of our customers pay the same prices even with some discounts for Avon products and when the discount is given only a small portion of the customer chooses to buy the product (with no margin).
The only solution that we offer (for the entire store) is to give those customers the same price as other Avon customers with the customer’s permission, if he is not happy with Avon’s offer. We ask these customers to have the option to buy Avon products, for a lower discount and then the store will be better for them. This will ensure the customer will be paid for in large numbers, which is critical to Avon and the customers.
At the same time, to ensure that our company is able to be our number one priority, we are also going to strive to make our stores in a more efficient and inclusive manner. We want sales and marketing to be inclusive and open. We also want to keep providing good service. We also want our customers to do well at work, at school. This is also important as well. For instance, with our sales and marketing initiatives, we will offer an hourly rate of 80% of the sales (with the option to increase the hourly rate to 50% of the sales!) and then a commission to the customer. There will be a direct tax benefit to all businesses and thus our business will be better for them. We believe that a sales representative who is part of the current customer’s staff is better than someone who is part of the current sales representative’s staff
There are 26 “two week selling campaigns.” For each campaign, the company produces a 150 page full color brochure featuring the entire product line available for sale. Representatives have to purchase these brochures and give them out to their customers. After this, the representatives make a purchase order and receive these after 5 days. It is the responsibility of the representatives to sort the delivered items and deliver the items to their customers. Avon also gives a 100% satisfaction guarantee for consumers who were dissatisfied with their product, they can return them to the representative and the representative will be the one responsible for handling these items.
In terms of marketing, Avon does not put too much effort in advertisements as they only spent $45 million in advertisements in 1999. This can also be attributed to direct selling as the representatives themselves are the ones who finds the customers. Another thing is sampling. Through the representatives, Avon can easily reach to their customers and give samples.
Technically, the selling process can be done through the website. Customers can easily go to their URL (avon.com) and make an order. But logistics and after-sales wise, it is possible but rather costly. First, Avon will have a hard time in fulfilling an order of every customer especially when a customer makes a per-piece order rather than delivering the orders to the representative and the representative to give the orders to their customers. Another thing is after-sales. Avon offers a 100% customer satisfaction guarantee. With their e-commerce website, it would cost them thousands or even millions of dollars if there were a lot of product returns. So it would be impractical to use the e-commerce website to be the main channel for distribution and selling of Avon. Also, the e-commerce site eliminates any interaction between the customers and Avon (in this case the representatives). Thus, Avon will not be able to reach them with samples and talks or recommendations on what to buy for their skin type etc, as a representative could. However, the website of Avon can be used as a B2B e-commerce where in a representative can input their orders to Avon therefore minimizing the time for ordering and saving costs in purchase orders.
With the use of e-commerce, Avon can reach almost everyone;