INTERNATIONAL BUSINESS 6
Avonproducts commenced its operations in the early nineteenth century.Avon specializes in the manufacture and marketing of beauty products.These products are classified into three categories. The firstcategory is beauty that deals with cosmetics, toiletries and skincare. The second group in beauty plus and this consists of fashionjewelry, accessories and watches among others. The last category isbeyond beauty that deals with home products, decorative products andtoys (Klepacki, 2013).
Thisgroup adopts different marketing orientations to market its products.The techniques used include direct selling, through the companywebsites and independent sales representatives. First, direct sellinginvolves selling products directly to the clients from a fixedlocation. This method is achieved through party plans, demonstrationsto customers and other personal selling arrangements includinginternet sales (Verbeke, 2009). Avon`s sales representatives wentfrom home to home and even at work places in order to make sales.This type of sale was a success as more people were persuaded to buythe products.
Theother marketing orientation used by Avon products was direct mailcampaigns. It is a type of direct selling where it targets customersindividually by addressing them by their names and demonstrating howthe products met their needs. This method was commonly used as ithelped in convincing a buyer on a one on one basis by establishingthe potential customers with similar features (Klepacki, 2013).Further, Avon products also recorded sales through company websites.Customers who visited the website learned about the beauty productsand made inquiries.
Avonproduct`s headquarters were in the United States, but majority of thesales came from outside America. These products had a huge marketglobally, and distribution was all over the world. Avon decided toconcentrate in the foreign markets than in the United States becauseat home, the market was saturated, and this would lead to stiffcompetition. Avon knew that it would be easier to rule theinternational market due to opportunities present. According to the2010 yearly report finalized by Avon products, the growth of theUnited States market was less by 5% as compared to the worldpopulation and concentrating on this market would be hard (Delphos etal., 2009).
Thereare numerous social and demographic changes that could affect Avon.These changes would lead to positive or negative effects on theoperations of Avon products. The positive effect of these changes isthat the growth in the economy of different countries widened themarket increasing disposable income. This would lead to morecustomers unlike in the past where most people viewed it as asecondary need (Verbeke, 2009). On the other hand, the adverseeffects that would affect Avon products are that more women could beemployed, and this would lead to dismissal of sales representatives.Beauty products are bought as a value for money and hence theemployed staff could decide to buy from rivals who sell expensiveproducts in order to fit in particular socioeconomic class (Doole &Lowe 2011).
Aglobal recession has different effects in different nations. Therecession in the United States market could lead to higher salesbecause buyers would prefer Avon`s products due to the value formoney. Further, recession would lead to unemployment of thesaleswomen, and instead sales representatives would secure these jobsbecause they could change appointments with their customers (Verbeke,2009).Contrary, depression can lead to poor sales because of people havelittle to spend, and one would rather buy an item of value ratherthan Avon`s products.
Themajor competitive advantage that Avon products are facing is that ithas employed many sales representatives in many countries who maketheir products accessible to people. The sales representatives ensurethat Avon products are available to customers in remote areas byimplementing plans that address specific markets and branding thathelp promote sales (Ulrich& Lawler 2013).Avon products support higher learning of the staff members, and thishelps develop new products and partnerships that enhance businessrelations. Further, Avon uses sales representative that greatlyreduces the cost to the company.
Thefact that Avon does not sell within the United States in retailestablishments has some advantages and disadvantages. The firstadvantage is that this distribution method enabled Avon to be closerto potential buyers, and receive immediate feedback. Secondly, thismethod reduces cost, and the products are cheaper as compared toother rivals in the market (Verbeke,2009).On the other hand, this distribution technique is faced with achallenge whereby the procedures and policies of the company arefollowed, and this calls for a lot of managerial activities.
Selectionof new suppliers by a company is a process that requires carefulconsideration. One of the primary concerns, when evaluating thesepotential suppliers, is their ability to access the market. This isin regard to the geographical coverage that the supplier will serve.The other element to consider is the whether the supplier has therequired resources.
Avonfaces a number of challenges in an attempt to maintain and expand theglobal manufacturing and supply network of its products. The need todevelop products that target different new markets and using uniquemarketing approaches to gain new and retain existing customers is achallenge to Avon (Doole& Lowe 2011).Different regulations apply to different markets, and this poses achallenge to Avon.
Delphos,W. A., Arnold, P. A., & United States Postal Service. (2009).Internationalmarketing resource guides.Alexandria, VA: Braddock Communications.
Doole,I., & Lowe, R. (2011). Internationalmarketing strategy: Analysis, development and implementation.London [u.a.: Thomson Learning.
Klepacki,L. (2013). Avon:Building the world`s premier company for women.Hoboken, N.J: Wiley.
Ulrich,D., & Lawler, E. E. (2013). Talent:Making people your competitive advantage.San Francisco, Calif: Jossey-Bass.
Verbeke,A. (2009). Internationalbusiness strategy: Rethinking the foundations of global corporatesuccess.Cambridge, UK: Cambridge University Press.