Avon and Marketing Orientations
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Avon and marketing orientations
There are five common marketing orientations: production, sales, customer, strategic marketing, and social marketing. The case study did not indicate anything that states the production orientation applies to Avon. Avons initial experience with the sales orientation was in Canada, which at the time of entry into that market was very similar to the U.S. market. Only 40 years later did Avon expand into another foreign market, when it began selling in Venezuela. Avons operations in the global market today include the use of customer, strategic marketing, and social marketing. Using the customer orientation, Avon modifies and markets its products to meet the demands of the country in which the product is to be sold based on that countrys preferences. An example of the strategic marketing orientation can be found when Avon found that Chinese law prohibited door-to-door sales, forcing Avon to modify the way it marketed and sold its products there. Avons campaigns to fight breast cancer and domestic violence are examples of its use of the social marketing orientation (Daniels, J., Radebaugh, L., & Sullivan, D., 2011).
Avons dependence upon foreign operations
Avon found that there was a vast untapped market for its cosmetics outside of the United States. The beauty market in the U.S. is very competitive, so Avon would have to wrestle sales away from competitors in order to see rapid growth here. Avon chose instead to focus on less competitive markets in other countries, which was a smart decision since only 5 percent of the worlds population resides in the United States (Daniels, J., Radebaugh, L., & Sullivan, D., 2011). Additionally, Avon has found that operating abroad in some countries helps reduct its effective tax rate (Cosmetic Design, 2004).
The effects of socioeconomic and demographic changes
Avon relies largely upon women who have the time and desire to be Avon salespersons. In nations where women traditionally work outside the home, either full-time or part-time, Avon may find more women willing to sell its products in countries where the economic situation is such that jobs are not plentiful. Selling Avon products does not normally require a woman to work full-time, meaning it could be a good supplemental income for some or an income rather than nothing for those who were otherwise unemployed.
Demographically, many nations are becoming more Westernized as time goes on. The increased calls for democracy in many Arab nations, for instance, could signal possible markets into which Avon could insert itself. Not all Arab nations are ruled under strict Muslim laws, and women there could desire to use beauty products that might not be available right now. Also, as corporations from more advanced countries open operations in less-developed, poorer nations, one could assume that there will be an increased demand for local workers, including women who could find themselves working outside of the home for the very first time and with income that could be used to purchase Avon products.
Impact of the 2008 global recession
Somewhat surprisingly, the 2008 global recession actually helped Avons global sales force to grow from 5.8 million sales representatives in 2008 to 6.4 million sales representatives in 2009, with a 3 percent increase in North American reps. Avon also reported a 13 percent increase in revenue between fourth-quarter sales of 2008 and 2009, resulting in a profit of $269 million (Dailey, 2010). Similar growth in sales forces were reported for some other companies using direct marketing, including Tupperware and one of Avons main competitors, Mary Kay.
Competitive advantages
Depending upon whom you listen to, Avon has a variety of competitive advantages. Graziano (1999) states that Avons greatest competitive advantage is that it has more independent sales reps than two of its direct sales competitors–Mary Kay and Nu Skin Enterprises–combined. Forbes (2011) cites other competitive advantages: having several new products as well as product extensions always on deck as part of its continuous innovation initiative; its sales force model; and its direct selling model, particularly in the developing markets as it allows Avon to quickly penetrate the market and even access remote communities without large capital investment.
Avons competitors, in particular Mary Kay, could duplicate these competitive advantages given enough time and a strong, effective marketing campaign. Avon has a number of competitors who are not in the direct selling business, and it is unlikely those competitors (including Maybelline, Cover Girl, Revlon, and LOreal) would change the way they market their products to a direct selling method. Because Mary Kay, like