Avon - Case Analysis

Avon Corporation In order to begin to understand the industry in which Avon functions as well as the specifics around the introduction of the new EAS drive, I used the 5Cs analysis to outline the company’s current situation. Situation Analysis via the 5Cs:

The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. The threat of

Companies across the world are determined to compete for the survival of their brands. The magnitude of success of the marketing and advertising strategies of a new or existing product is majorly depended upon the organization itself. As a matter of stated facts when an organization advertises its products in the market they first have to identify the relevant answers of some questions like what is the product aiming at? What benefits will the user seek by this product? How the organization plans to position itself within the market and what differential advantages will the product offer over the competitors. Because the bottom line of all marketing and advertising campaigns, is to provide the suitable collection of benefits to the end users of the product. Successful companies are usually recognized as iconic brands. Success of a

1. REVLON INC. EXISTING VISION AND MISSION Vision Provide glamour, excitement and innovation to consumers through high-quality products at affordable prices Mission To emerge as the dominant cosmetics and personal care firm through the twenty-first century by appealing to young/trendy women, health-conscious women (skin care), and older women with its variety of brands 2. NEW VISION AND MISSION STATEMENTS FOR REVLON INC. Vision To be wellknown and accepted as the high value provider by constant innovative and improvements products to keep pace with the changes in consumer lives.

Threat of Substitute Products and Rivalry Among Competitors- these two forces are closely related. In marketing, the word “product” means more than a good, service or idea. Product is a broad concept that also encompasses the satisfaction of all consumer needs in relation to a good, service or idea. All planning strategies have the goal of creating a sustainable competitive advantage in which other companies simply cannot provide the same value to their customers that the firm does, no matter how hard they try. When a national chain retailer has a competitive advantage with a product, it must take steps to safe guard that product to stay different and unique in the marketplace. For example, Macy’s is the exclusive retailer for Martha Stewart home lines and is currently in a legal battle with JCPenney who announced that they will carry that line as well.

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

The threat of new entrants is high in the fast segment. There is a threat of new entrants is because the entry barriers are very low. The business barriers to entry the market could take those forms: first one is the capital costs, the higher the investment required, the less the threat from new entrants. Secondly, regulation and legal constraints are the main concerned points. In most industries, regulations related to health and safety, products handling, and licenses to operate, export, or install new facilities. And other forms of barriers could be brand loyalty which could be an important factor in increasing the costs for customers of switching products. The new entrants need to change the valuable brand suppliers with its efficient economies of scale to have a reasonable supply chain network or corporate with the low cost producers to supply the products in the market. Also it might gain a large market share in the market as well. For instance, Sports Direct Company reported retail sales were £371m while gross profit increased 9.6 percent to £149m, it

Threat of New Entrants: The threat of new entrants is very low in this industry. Most of the companies have over a hundred year’s history and their brands are based on their heritage and tradition. Even a new company with a large amount of initial

Document purpose: suggestions to increase acceptance of Ogilvy & Mather’s new Vison on employees below senior executive management.

New entrants The risk coming from new entrants is low, except perhaps, for the development of niche brands that can slowly earn a position. The strong financial resources and the "story" of the brand that is needed to succeed are two elements that create a barrier. Bernard Arnault explained that a brand needs a heritage; you can not cross cut and succeed (Thompson, Strickland & Gamble 2005 and Antoni 2003). Furthermore financial resources are very expensive since lenders perceive that the expected margins are difficult to get; thus it is hard for smaller companies to access financial markets (Colonna 2003). The "entrepreneur / designer" will need to look for a "godfather"the support from one of the big groups. As Muriel Zingraff, Harrods' director, observed, "We may have more patience with smaller brands if they are owned by a parent company, such as LVMH or the Gucci Group."(Sherwood 2001, p. 6) Additionally the

Avon, started its journey in the early 1886 is now the oldest and the largest marketers and manufactures of the beauty products. The advertisements from “Ding dong, Avon Calling” to “Hello Tomorrow” and from “You never looked so good” to the latest one “The Company For Women”, always helped Avon to improve its image and enhance the marketing strategies to serve the purpose. One of the amazing facts about Avon includes that it’s headquarter is situated in USA but major portion of its sales comes from outside North America. Avon has captured a huge market all over the world and its distributing the beauty solutions to almost all parts of the world. With Avon being a part of 112 countries, the company has

As stated in the case, the ban on door-to-door selling was lifted in 2005. Avon Products and Amway are taking advantage of this by using door-to-door selling as a method of marketing their products. The main advantage to using door-to-door selling in the sale of cosmetic products is that it is a cheap and cost effective method of getting products across to the customers. Companies do not incur the cost of setting up physical stores and hiring dedicated sales person when using door-to-door selling as the products are sold directly from the manufacturer to the customers via one level of sales representatives. Illustrating the success of this method of sales, Avon Products had already recruited 350,000 sales representatives by the end of 2006. We can assume that most of these sales representatives are being paid purely on a commission basis and Avon Products does not incur any other additional or fixed cost in employing these sales personnel thus making it a very cost effective method of selling products. This and the lack of intermediaries between the manufacturer and the customer mean that the

The threat of substitutes is the availability of a product that the consumer can purchase instead of the industry’s product (Free management books, n,d ). A substitute product is a product that produced by other industry and offer similar benefits to the customer as the product produced by the firms within the industry. The threat of substitutes can affect the competitive environment for the firm in that industry and also influence the profitability of the industry. This threat affects profitability of the industry because the consumers can choose to purchase similar product from other industry to instead of the company’s product. Besides that, the more the close substitute product can make the industry more competitive and decrease the profit potential of the firm in the industry whereas the less the close substitute product can make the industry less competitive and

            Other environmental influences, such as competition, may fuel the company’s desire to create more and better products that could well determine their location and standing in the global market. Increase in the number of competitors for the same line of products may mean that there

Many cosmetic brands are popping up recently, perhaps, due to the increasing consumers of products that beautify and enhance the physical appearance of a person. Even though the market is already full of the said cosmetic brands, the company L’Oreal Groups could still be considered as the leading supplier of cosmetics and hair-color. This study is a brief overview of the marketing concepts and strategy of the said company. The company profile will be presented to be able to give a clear view of the market to which the company belongs to. An internal and external (SWOT) analysis of the company will also be provided in this paper. Another area will be specifically devoted to