1. Integrated Marketing Communications MKT 642 Amy Thomas La Donna White September 17, 2003

2. Summary of the Case History –Founded 1886 by a book salesman (David McConell) –Avon Lady –1950’s –1970’s –Direct mail attempt in 1990 –New CEO Andrea Jung

3. Summary of the Case Thoughtful transformation of Avon –Enhancing Avon’s image around the world –Expanding the Avon brand into new markets –Creating new products and new channels –Increasing growth in Avon’s core product line –Enhancing the experience of the Avon representative

4. Summary of the Case Core Product Line –Lipsticks, cosmetics, and nail care –“Avon Color” –Fragrance –Personal care products Competitive Price Position –Mass beauty product companies –Prestige beauty product companies

5. Summary of the Case Stranded customers –5 million consumers –Selling process –Independent contractors –Direct sells –High turnover –5% of the US workforce –Independent contractors

6. Summary of the Case Avon.com –Launched in 1997 –Direct to consumer sells –Design problems –Online inventory Edward’s Dilemma –B2B vs. B2C Commissions Marketing Product Shipping

7. Who is Avon’s Target Market? Sales Representative (500,000 direct sellers) –5% of the direct sells force in America –Heavy users of Avon products –Discounts for being a representative Secondary Market (25 million women) –Women –Ages 25 - 50 –Employed –Representative is a coworker –Representative is a friend or family member –Purchase beauty supplies from drug store –Average to below-average incomes

8. Should Avon sell direct to the consumer? Selling directly to the consumer through AVON.com will benefit the company, the representative and the consumer

9. Benefits for the Representative Commissions Increased customer base –Global market –Maintain customers when you move Easier ordering system Products shipped directly to the customer Access to better and more beauty information

10. Benefits to the company Reach more people Increase in awareness Easier ordering system Remain in contact with customers when representative move Create a sense of community Maintain low product price

11. Benefits to the consumer Easy ordering system Direct deliveries Low prices Free information

12. What does selling mean for Avon? Selling = direct sales approach –Will this approach allow Avon to grow? Reach more consumers Stop relying on representatives –Keep representatives happy Using the web –Cheaper –Global –Creates new product opportunities

13. What are the potential channel conflicts? Distribution problems –inefficiencies Representatives Solution –Create an online community for women –Representatives receive commissions and discounts from web purchases

14. After 1997 Current website includes products, beauty information, and representative section

15. Questions