Avon Calls on Foreign Markets
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There are five marketing orientations: production, sales, customer, strategic marketing, and social marketing. The production orientation is based on the belief that the customer prefers low prices combined with the availability of the products they want. With this concept comes low costs, mass distribution and higher production efficiency (Roberts, 2011 ). Avon produces many products for many people, but does so without much research into what the customer wants. The product orientation assumes the consumer knows the price of competing products; there is little emphasis on marketing or analysis of customer needs with this orientation.
Sales and Customer Orientations
With sales orientation, the company does not change its product for sale domestically or internationally. This orientation believes that all customers around the world are similar; managers focus on selling rather than customer desires (Roberts, 2011). Avon has always relied on direct sales which allows for smaller numbers of employees and does not usually use a store to sell its product; but due to economic changes, they have begun to sell in small outlets and retail store kiosks.
The customer orientation is based on the country as a constant with the variable as the product and method of marketing changing to fit the country (Daniel, Radebaugh & Sullivan, 2011). Avon has developed products for different countries to fit their needs, products contain insect repellent for Brazil, skin lighting creams for parts of Asia and technology driven products for Japan.
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Strategic and Social Orientations
The combination of production, sales, and customer orientations is the basis for the strategic marketing orientation. Avon is able to combine the three effectively in their campaigns over the world. Social marketing orientation requires that the International Marketing be aware of potential environmental, health, social and work related problems that can surface when selling or making a product abroad (Daniel, Radebaugh & Sullivan, 2011). Avon is able to concentrate on environmental and health concerns in all its manufacturing plants, and be socially responsible at the same time.
Avon??™s Dependence on Foreign Markets
Avon has found there is no market left in the United States for cosmetics, so they have gone international. With the economy in the United States as it is, many women are going back to work, so they cannot participate in selling Avon products. Even as the economy improves, still only 5% of the world??™s population lives in the United States; for this reason, Avon chose to go abroad to sell its products (Daniels, Radebaugh, & Sullivan, 2011).
Socioeconomic and Demographics Changes Affecting Avon
Due to poor infrastructure in other countries, women cannot go many places to shop for cosmetics, so Avon went to them via their representatives in places like the Philippines and Brazil. More women are working full time throughout the world, so Avon has to evaluate which countries have people available to sell their products. In different countries, women may or may not be able to work outside the home so it is not likely that Avon will choose areas where women are not allowed to work. There are many countries with remote areas where people cannot get around easily because of poor roads, poor transportation, etc., so the Avon representative cannot
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sell the products as well as they could in a more metropolitan or much less remote area of the country. Additionally, many areas are economically poor and cannot afford their products (Lippman, Gardner, Chavez & Sanford, 2005).
Difficulties Avon May Have in a Recession
Being able to give the customers the products they want comes with a price – (Lippman, Gardner, Chavez & Sanford, 2005) manufacturing costs increase and prices may have to change. Avon is also cutting back on old product lines while developing new ones. They may have to decrease prices of some products, or lose some of the market if a recession occurs again. Customers will probably continue to buy what they consider essential, but will not buy the nonessential items Avon sells.
Competitive Advantages of Direct Selling
Avon??™s method of direct sales gives the company an advantage that most businesses do not have; they will not compete with stores by selling in them. With the face to face contact they have with the customer, the representatives are able to report what customers say and Avon can adjust accordingly (Maitl, 2009). Another competitive advantage of the Avon Company is their being able to determine the market. They have gone into remote areas where there are no stores, Internet, or much of a connection to the outside world to sell their products, and they probably have some product the customer wants no matter how remote they are (Miller, 1998).
Can Avon??™s advantages be duplicated
It is not an easy task to duplicate Avon??™s advantages. Any company can investigate a potential customer base, but not many businesses are willing to sell directly much less go to
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remote areas as Avon does. Mary Kay Cosmetics, Avon??™s competitor, does not sell directly to the customer as Avon does, and is much more expensive. Avon has also reduced its costs by making new products while retiring the old ones. It also continues to recruit women to work part time for extra money.
Pros and Cons of a Direct Selling Operation
Most direct selling businesses do not require a large financial start up. It is possible to make a good earning in indirect sales, but most people do not; you can work as much as you want, fulltime or part time depending upon your needs. On the downside, direct sales require a great deal of time to recruit people to sell and find more distributors. Since direct selling means face to face contact, many direct sellers sell to family and friends who may not appreciate the barrage of sales pitches to them (Edwards & Edwards, 2011).
How to Find a New Supplier
The potential supplier must be reliable; they must get the product to the company on time, every time. Decide whether you want a large supplier or a small supplier; sometimes a small supplier will give you more attention. Whether the supplier is reputable is paramount to the success of your business; shipping early or late can be a sign of trouble for the vendor. The location of the supplier will be important to avoid freight charges from a distant vendor. Obtain their policies regarding shipping rates, quantities needed for free shipping, etc., and be sure their financial terms are adequate (“How to find,” 2011).
Where to Manufacture and Challenges for the Future
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Deciding where to manufacture depends, to some extent, on where you intend to sell. If the majority of the largest sales will be abroad, it may be advisable to build there to prevent high export fees. The location also depends on where you find the labor you need; some countries have cheaper labor than others, but the skill level may not be what you need. Evaluating legal and political environments is important because some countries have legalities that will prevent your business from thriving. Politics may or may not prevent your business from being formed or delayed indefinitely; stable political environments are ideal. Good infrastructures are necessary for manufacturing; a business needs water, electricity, and adequate transportation, etc. to be able to function adequately. It is also important to manufacture in an area that is not in a remote area to able to be near vendors, customers, legal offices and other businesses with which the company may need to interact (Daniels, Radebaugh, & Sullivan, 2011).
Avon faces the challenge of getting the product to the customer sooner. It may be easier to go to a store and get a product instantly than wait for Avon to deliver it. The brochures offer many products that have a specific color or texture; it is difficult to get an accurate idea of the true color from a brochure and when the product comes, it is sometimes not the color expected and will be returned. Avon offers good value for the prices they charge, but many customers feel the products are not as good as a name brand product and will not buy from Avon. These are difficulties that Avon must face head-on to be able to compete in the future (Daniels, Radebaugh, & Sullivan, 2011).
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Roberts, C. (2011, May 22). What are the five marketing management orientations. Retrieved from http://www.ehow.com/info_8469688_five-different-marketing-management-orientations.html
Daniel, J., Radebaugh, L., & Sullivan, D. (2011). International business. (13th ed.). Boston, Ma.: Prentice-Hall
Lippman, S., Gardner, M., Chavez, C., & Sanford, M. (2005). Ding-dong, avon calling-Avon:Reshaping the tradition of brand community. Retrieved from classes.business.oregonstate.edu/fall-05/ba509/Avon.doc
Maitl, S. (2009, October 16). [Web log message]. Retrieved from http://timovate.wordpress.com/2009/20/26/its-the-avon-lady
Miller, R. (1998). Selling to newly emerging markets. Westport, Ct.: Quorum Books
How to find and work with suppliers. (2011). Retrieved from http://www.entrepreneur.com/article/66028