Luigi Vittatoe
Professor Stanley Klatka
BUS1801 Global Business Perspectives
August 31, 2015
Week 1 Discussion
What are the advantages to a consumer in the remote Amazon of buying a beauty product from a direct sales representative, over buying the product from a retail store in the nearest town?
A consumer would have direct contact with the sales representative who belongs to the same community as that of the consumer. The consumer would have an access to interaction with the sales representative and would receive feedback on the product before purchasing it. Direct sales representatives also reduce the travel time and cost traveling to a nearby town to purchase the product. Millions of women gain skills and experience in becoming entrepreneurs by working in direct sales.
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The population in this area largely consists of seasonal agricultural people with o fixed income, and the availability of 2 million Avon representatives in Brazil brings the competitive edge in promoting and marketing the products. The use of beauty products is declining in this area because it’s of no use to the agricultural population. The rules they established in this area are based on local values than global values to overcome the
* Sales reps secure the best product placement in stores, conducting taste tests in stores and convincing “individual store managers to pull the product from the central buyer.” (Singer, 2008)
Globalization is a growing part of everyday businesses. This is the process of interaction and integration among people, companies, and governments of different nations. With the world of online retail, the buying and selling to one person to another has grown drastically. There has also been a substantial change in technology and what we as people can do in today’s time rather than in the past. Amazon is a huge retail giant and buying and selling items is one of their key functions. The impact made on Amazon is nothing but an advantage. Amazon currently is the 56th largest company in America by market capitalization. Being one the largest retailer around, 15th in the nation at that, Amazon has made a name for themselves. Amazon has made some very substantial growths and with these opportunities they face they can make even more advances in the future. (Globalization 101, 2016)
Finally the Avon uses global distribution. The company does this to independent representatives who have taken orders from customers they have either communicated with or visited. This helps Avon to cut on cost of manufacturing excess goods which will not have an order.
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
Because Japanese women had by far the highest use of beauty care products in the world, it was natural that the global beauty care category management started to regard Max Factor Japan as a potential source of innovation
2. What are the advantages and disadvantages of selling cosmetic products through door-to-door selling, specialty stores, department store counters, and supermarket and hypermarket? How will the use of these channels vary with target market segments and brand strategies?
In the article “Amazon.com is a 21st Century Deal with the Devil”, Amy Koss claims that American malls will disappear; however, this is entirely untrue. According to Koss,
First of all, if he decides to focus only the direct sales, the most obvious benefit is a growth of sales. In this case, there is some specific information which sets out how this achievement can be gained. According to the case study - BOC group: Ohmeda, it noticed that “Specialization would enable Ohmeda’s salespeople to develop a better understanding of their equipment and its, clinical application and, as a result, it would increase sales.” . Further, at current, the company established well-organized channel of distribution in term of direct sales . Moreover, both managers and sale reps have the professional
Canada has a diverse population. If Amazon builds its HQ in a city like Toronto or Waterloo, new jobs will be available (thus increasing the employment rate in Canada). According to The Star, Canada's largest daily newspaper, Amazon is already looking for 200 employees more. Furthermore, because of the immigration ban in the USA, and Canada being a neighbour to the USA has similar resources, Amazon would prefer placing their HQ in Canada because of its pro-immigration policies. Jim Watson, mayor of Ottawa, has said that because of Canada's immigration policy is so liberal and "non-discriminative towards ethnicities", Canada has the benefits of being Amazon's second HQ's
By adding another channel for clients to buy their products, they could reach customers where, when, and how they wanted to buy. Progressive wanted to appeal to as many customers as possible and knew they could achieve a competitive advantage and grow their company faster if they modified their distribution plan. Thus, selling direct help their agent’s business as well. It made Progressive bigger and better since they had focused their marketing message to consumers and growing the direct channel and advertising help grow the agent’s channel. At the same time as more consumers knew of Progressive’s name, they could go into agents’ office and ask for it.
As the consumer attitude gradually changes, people are more in favor of the natural and safe products in cosmetic market. Australia consumers are not exception. They respected green-added cosmetics, namely, they are increasingly in pursuit of natural, pollution-free cosmetics with no chemicals added. Consequently, the products of chemical-free will gain competitive advantages in Australian cosmetic market to meet the consumer’s psychological needs for green, organic skin care products.
The selling power in developing countries and emerging markets is relatively low. This can be argued in Jamaica’s case as the demand for cosmetics continues to grow consistently. In fact, not many companies have ventured into developing products which meet the specific needs of this market segment. In order to achieve long term profitability, new market entrants should focus on this neglected population segment. The high selling power in the developed countries leads to high competition and an overall reduction in profitability for cosmetic firms in this industry. This is based on most of the largest cosmetic companies are based in developing countries.
France is the last Western European country that is being looked at by Natura. The pros are they sold 11 billion euros in cosmetic sales just in 2004. The market is solidified which means that the companies that have been able to work their way into France have thrived. This is good because the economy is strong there and France is always looking to “diversify product ranges to stimulate demand and boost value growth” (Paavola, 13). Natura can come into France and be the new product that changes the market due to their eco-friendly approach. Another pro is that France has had a shift of consumers buying products that have higher value. Unlike other countries where the consumers prefer lower cost, in France it seems like products that are higher quality will produce more sales. Although a con seems to be that mass markets have been successful and lead in sales the customer service is not up to par. Natura can have an advantage especially through direct sales. Direct sales allow for quality customer interaction and this can allow them to show the customers that they care for them. This would be successful in France because sensory marketing is thriving in France. This would allow for Natura to use their sale representatives to show how the cosmetics are actually are good for the economy and giving them an emotional connection to the brand. Some cons are that the leading brands in France are French, but the reasons are all connected. The biggest con is that no new market has
7. What do you think are Avon’s prospects in India, given that the per capita spending on beauty there is only $1, compared to between $100 and $200 in developed markets?
Amazon throughout the years has expanded their facilities throughout the U.S and growing at a rapid pace in rest of the world in the past five years. Amazon was able to develop business in the Midwest as well as in the Southern State. One of their main focus is to build many headquarters and facilities around the world mostly near large populated cities because it can be easier and quicker to distribute them. Based on Amazon's Fulfillment Center Network it is mentioned that the largest amazon's fulfillment center is located in 6835 West Buckeye Road, Phoenix, Arizona. The size of the facility is “1,009,400 square feet”2. Some of the large cities that is located near the facility are Mesa, Tucson, Chandler, Glendale, and Scottsdale. One of the main reason why Amazon plan to build more facilities in Arizona is the fact that it is a highly competitive corporate headquarters for many business and is in the top five largest cities in the United State. Moreover, in the past years technology has penetrated industries and without no doubt in couple year’s automation would be replacing humans as it is seen as a competitive advantage. Even though, automation is setting the standards for many businesses and a highly competitive factor in today's industries, there are many advantages of automation taking over the workforce as well as disadvantages. It is used to complete a task faster, cheaper, and with a greater accuracy. The first advantage is that with automation is the reduction