Avon Case Study

1746 Words Nov 5th, 2005 7 Pages
Executive Summary
Avon Products, Inc. (Avon) is based in New York. The firm engages in the manufacture and marketing of beauty and complimentary products primarily in North America, Latin America, Europe, and Asia Pacific (Yahoo Finance, 2005). Avon's products are classified into three product categories: Beauty, Beauty Plus, and Beyond Beauty. The Beauty category consists of cosmetics, fragrances, skin care, and toiletries; Beauty Plus includes fashion jewelry, watches, apparel, and accessories; and Beyond Beauty comprises home products, gift and decorative products, candles, and toys (Ibid). The company sells and markets its products through a combination of direct selling, marketing by independent Avon representatives, and via its
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The results were downward revenue trends and slow growth throughout the 1990's which resulted in several takeover bids.
Unfortunately, Sears Roebuck and JC Penny do not really resonate well with being a carrier of women's beauty supplies. The name "Sears" have been associated with appliance and not beauty products. The move of aligning with this companies and trying to sell higher end beauty products will only push Avon in the opposite direction that it should be heading, which is to move back towards tailoring to women domestically and globally.
Over the years, Avon has experienced several problems leveraging its brand in many of its product lines. As a result, positive net sales and earnings growth for the past five years have been in single digits and steadily declining year after year (Pearce & Robinson, 2004). Specific problem areas are stagnated sales, slow earnings growth, limited distribution capabilities and shift in personal care preferences and spending habits.
Andrea Jung's proposal to expand into certain retail markets will only perpetuate Avon's trend of declining net sales. The proposed plan will indeed create an additional distribution outlet and cater to this market segment. However, the question to examine is at what expense or cost will Avon endure making this decision? Avon has faced tremendous pitfalls marketing its product lines to effectively increase brand loyalty and recognition. Examples of this include the hair care product line. Avon

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