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									      Ding-Dong, Avon Calling…




Avon: Reshaping the Tradition of Brand

           Community


              BA590

            Samuel Lippmann
            Marianne Gardner
             Cynthia Chavez
             Melody Sanford
       “Ding Dong Avon calling” is one of the best-known branding catch phrases for

the 1950s, but the Avon Ladies have moved on from the iconic-smiling American

homemaker to the working mother on-the-go of today. In response, Avon has had to

rethink, reevaluate and redefine its customers, products and business strategies to reclaim

the market power and presence it once had.

       Historically, the first Avon Lady was actually a man, young salesman named

David McConnell. He launched Avon Calling in 1886, offering women cosmetics in the

comfort and privacy of their own homes, but ironically, perfumes and hand-cream were

not McConnell‟s initial merchandise. At the age of sixteen, McConnell sold books door-

to-door and when they were not well received, he resorted to the advertising gimmick of

offering a free gift in exchange for being allowed to make a sales pitch. McConnell

realized that women liked his perfume more than his books. So, he abandoned books and

organized the New York-based California Perfume Company and the door-to-door

approach seemed a perfect fit for cosmetics, particularly in rural areas, where

homemakers, in horse-and-buggy days, had poor access to better stores.

       In 1939, California Perfume Company name changed to Avon Products, Inc. The

company was renamed Avon for the simple reason that the New York State town in

which David McConnell lived, Suffern on the Ramapo, reminded him of Shakespeare‟s

Stratford-on-Avon (ideafinder).

       Avon suffered a decline in its fortunes in the 1970s and 1980s owing to changing

lifestyles. Many women began working outside the home, the arena where most of its

demonstrations and sales had traditionally taken place. Also during this period, many

salespeople left Avon to pursue more lucrative career opportunities. In the 1990s, the
company redesigned its focus and advertising, upgraded its product line, and trained its

sales force to make presentations in workplace settings, where 50 percent of sales now

take place. Avon also considerably expanded its presence outside of the United States,

especially in Brazil and other South American countries, China, and Eastern Europe.

         Today, despite the scores of expensive American and foreign brand-name

cosmetics, Avon ranks first in sales nationwide, with Avon Ladies ringing doorbells from

coast to coast. With more than 2.6 million representatives worldwide, Avon‟s annual

sales top $7.7 billion (Avon).



Management

Andrea Jung joined the company in 1994, ascending through senior positions until she

was appointed CEO in 1999 and elected Chairman of the Board in 2001. Jung is the first

woman CEO in Avon‟s 119-year history and as CEO, Jung has revamped Avon‟s image.

When Jung took charge, Avon was faced with waning sales and a lackluster public

image.    In Jung‟s own words, “the company was out of step with the needs of

contemporary women. We knew we needed a fresh strategic approach. We needed to

crystallize our vision.” That new vision crystallized in the new tag line “Avon, The

Company for Women” (AU press release).

         With this new vision, the brand was made more hip and relevant including new

products for teens, men, older women and women of color. Ad campaigns featuring

African American and Hispanics celebrities expanded the target market. Jung intensified

Avon‟s focus on global expansion.       Networks were put into place internally and

externally encouraging diversity and philanthropy (BSRResourses). Since Jung has
implemented her vision, sales have increased 45% to $7.7 billion in 2004 and stock prices

have risen 86% to $27.63 in November 2005.            Under Jung‟s leadership, Avon has

received numerous awards worldwide in recognition for its brands, customer satisfaction

and philanthropy. Jung herself has received accolades for her success. In 2005, she was

ranked #5 on Fortune magazine‟s “50 Most Powerful Women in Business” list. This is a

fitting recognition for the woman who seeks empowerment for all women.



Brand Strategy

Avon‟s brand strategy is to empower women through the creation of opportunities.

Opportunities to meet new people, achieve economic independence, support social causes

                                                       all while fulfilling their individual
       Brand-                            Product
       Avon                                            quest for beauty.            Avon builds

                     Focal Customer -                  brand value through innovative
                     Customers and
                     Sales                             products       and     processes,    the
                     Representatives
   Customer
   – End                                   Marketer    unmatched            power      of    its
   User                                    - Avon

                                                       distribution     channel       and   the

earnings opportunity it provides women. In addition, the power of their global operating

model, philanthropy, and their people contribute to brand equity. This has positioned

Avon as the top direct seller of cosmetics in the world.
Key Resources

Integral to Avon‟s brand community are its key resources.           Key resources include

conventions, consumer events, enterprise awards, cause marketing, scholarships,

websites, publications and parties/open houses.

       In 1998, Avon held its first annual National Avon Representative Convention. At

the conventions, all of the prime elements of brand community emerge; consciousness of

kind, shared rituals and traditions, and a sense of moral responsibility with the resulting

effect of increased brand loyalty. Thousands of excited, enthusiastic sale representatives

attend along with key executives, top sellers and employees with an atmosphere of

business and fun. On the business side, there are motivational speakers, product and

training seminars, product displays, along with the latest news on all of the upcoming

changes in products, leadership programs and e-commerce. On the fun side, there are

celebrities, stage shows, raffles and free products. On the serious side, news regarding

the cause marketing efforts is relayed but the vibe remains positive and energizing.

Reflecting on the experience a sale representative mused, “As much as we enjoyed the

good times and appreciated the new knowledge, we were really most happy just to be

together – thousands of people who know Avon, love Avon, are Avon – to feel the pride

and share the dreams” (Beauty Dish). These conventions are effective in instilling a

sense of pride and loyalty within its sales representatives as well as serving as recognition

for a job well done. Vickie Stiner, one of Avon‟s top sellers, won an expense-paid trip to

the national convention in 1999. "I've been in it for a while and I like that they give good

recognition to their top sellers. It's important to me. They also give us great training. If
you have a question the company helps answer it. Avon has treated me very well"

(kobeyswap).

       The pride and wish to share the dreams does not stop at the conventions. The

Avon Foundation champions causes that affect women worldwide. Through its Breast

Cancer Crusade, Avon has raised funds for research, clinical care, and education

programs targeted primarily at medically underserved women. Avon also sponsors a

domestic violence program which focuses on domestic violence education, awareness

and prevention and support for victims. At the grassroots level, sales representatives and

their local communities raise funds. At the company level, Avon has formed alliances

with the business community, government and social agencies and partnered with

celebrities, such as Salma Hayek and Serena Williams, to promote the causes. It is

important for Avon to not only provide women opportunities in business but to also build

a corporate image that demonstrates their overall commitment to women. A number of

recent studies have documented that consumers carefully consider a company's reputation

when making purchasing decisions (The Foundation Center). Avon‟s cause marketing

and fund-raising efforts for issues that effect women positively builds their reputation

which in turn, promotes customer loyalty.

       Avon is also building customer connections with its consumer events. One of the

events is its fourth annual “Let‟s Talk Beauty Tour”. Avon is traveling across America in

a mobile beauty salon inviting women to learn more about Avon while they get a

makeover and vie for a chance to win a trip to the Bahamas. Additionally, Avon is trying

to build new customer connections via the World Wide Web.             They offer on-line

customers and representatives access to beauty and selling tips, in addition to enabling
online sales. Avon has structured their online platform for both ease of use for the

consumer and the retention of business for representatives. Consumers pay the same

price for goods online as they would pay to their Avon lady reducing the threat of

consumers circumventing their reps to obtain a better price. Also, consumers can credit

their sales rep during the online transaction so that both the consumer and the Avon

representative feel good about the offering. This online arrangement is effective in

expanding Avon‟s resources and capitalizing on an increasingly important marketing tool

while still maintaining the essence of Avon, its sales force. As expressed by a couple of

Avon representatives interviewed, they had mixed feelings about the online ordering

system but understand it is part of doing business in a technological world and Avon is

just reacting to the needs of the consumer. In response to the online ordering system,

some representatives have built their own websites advertising to customers and

mentoring their “downline”/recruits. The websites‟ main purpose is to meet consumer

demand for online information while still maintaining ties to the representative.

       Representatives connect with each other through local district meetings and award

ceremonies and connect with customers through open houses and parties. The most

intimate connection, and perhaps most meaningful, is accomplished with face-to-face

direct selling by sales representatives who are spreading the word, samples and brochures

about Avon while making friends in the process. The interpersonal relationships formed

with the makeup parties and face-to-face selling is the cornerstone of the traditional Avon

business model. It has been very successful for Avon to hand out samples of the newest

product and to distribute catalogs showcasing the latest trends to potential and existent

customers. Samples offer a way for consumers to try before they buy; a definite upside
to traditional retail outlets which can be buy before you try. Also, the catalog is an

effective marketing tool that allows customers to peruse the latest products at their own

convenience in their own home. Avon realizes the importance of the samples, catalogs

and direct selling to their success and utilizes a lot of their resources in the creation of the

right mix that will entice customers to buy more products.



        Avon currently employs a number of marketing strategies in which to build

community within their different product lines. Avon has a couple of distinct lines with

different target markets that comprise the bulk of their products. The traditional Avon

fare is makeup and perfume for middle-aged women of various demographic

backgrounds that enjoy a sense of community through the relationships with their Avon

neighbors, fellow church members and friends. Over the years, this traditional segment

has waned somewhat with the success of competing brands utilizing the direct sales

method, in addition to women taking on more duties outside the home, and consequently,

the free-time Avon capitalized on to build relationships is now spent maintaining a home.

        Avon has employed a number of techniques to counteract the loss of the

traditional segment; a few include sales representatives catering their sales pitches for the

workplace and allowing customers to order online at their convenience instead of calling

their representative. According to Jung, "We have a great core direct-selling business,

but now we have a brand that can expand into new channels: new customer segments like

teens, and new brand extensions like wellness" (pbs). Avon has broadened the scope of

their market from the traditional segment to include a couple of emergent markets; the

youth segment with its brand mark, the metrosexual market with their Men‟s Catalogs,
the older generation with their wellness and cosmeceutical products and the international

market with the expansion of Avon selling in various countries around the world.



Youth Market

       Within the past few years, Avon has recently realized a new target market that has

recognized a community that is very powerful in terms of sharing meaningful

                        consumptions – a new generation of youth. Teenage girls and

                        increasingly teenage boys engage in primping and grooming and

are spending more money each year in this industry. Business intelligence and market

research firm Global Information Inc. reports that with an industry already boasting $6.9

billion in annual sales, youth hair-care, cosmetics, skin-care, and ethnic health and beauty

items are projected to rise up to $8 billion in sales by 2008 (Pennington). According to

Avon research, there are more than 300 million young women in the 16-24 age group in

Avon‟s top 30 markets who spend over $200 billion annually on consumer goods. Avon

has recognized this potential global market and as a result, has released mark., a brand

that “celebrates remarkable young women who are making their mark in the world”

(Cosmetic Packaging).

       “Young people are increasingly united around the world.” They listen to the same

music, watch the same television shows, wear the same clothing, and communicate

through the internet. “They think of themselves as part of a new mega-culture that is hip

and dynamic and as a result are increasingly generational, rather than cultural or

geographical (Prestige Brands). Such a market is powerful in the sense of influencing

tastes and preferences. Avon‟s release of mark is directed towards young women and
due to its unique direct selling nature, personal networks are formed. Avon will realize

the benefits of customer relationships and brand community.

       Not only does Avon offer the product line that is available in the mark. catalog or

magalog as Avon calls it, but it provides young women “a direct-selling opportunity, and

a unique brand experience that engages them in a world of community, participation, and

empowerment” (Avon mark). This is an opportunity for young women to make their

marks on their financial future in earning up to 40% of sales (Mark).

       Young women are also given the opportunity to communicate and converse with

each other as they gather for mark. parties, which serve as a key resource for Avon and

the young women to share their opinions on the products, trade beauty secrets, and

consult each other‟s opinions on colors. Like brandfests, mark parties enable a gathering

of a brand community the opportunity for high-context interaction. During the term of a

traditional mark party, young women manifest themselves in consciousness of kind and

shared rituals and traditions. Selling through personal networks is important especially in

“traditional” societies, as will be covered in more depth in the Emerging Markets and

Globalization section below. When the segment of the youth society is examined, it is

noted that young people have a lot of extra time on their hands. This creates a need for

them to congregate and socialize and socializing is a key factor of the “tradition” of

teenagers, which makes mark parties an extremely valuable tool in delivering the

experience.

       The use of Avon‟s choice to target the generation segment has helped to better

develop relationships with their customers.     Because the young representatives who

decide to take advantage of the role of an actual Avon representative, the Avon brand
becomes a central part of the overall generational community as the representatives

introduce new, fun, and trendy products to their own peers and community in which they

live. Because it is their friends that the youth representatives market to, the value of trust

is introduced, which is a key factor of loyalty.

       Such a global market of the new generation is powerful in the sense of influencing

tastes and preferences. As such, different factors influencing the adoption process may

affect one‟s likelihood of adoption. A person‟s level of innovation is “the degree to

which an individual is relatively earlier in adopting new ideas than the other members of

his social system” (Kotler 356). It is important for Avon to identify “early adopters”

because it is they who are the trend setting opinion leaders that others look up to and

admire.    Avon‟s marketers need to research this particular group‟s demographic,

psychographic, and media characteristics in order to communicate and directly target this

audience in terms of both selling opportunities of becoming Avon representatives as well

as becoming Avon customers.

       Company officials said that so far, the reception to mark has been strong, but the

challenge is whether the strategy will be compelling enough to woo young women away

from other brands in a very competitive business (Avon Trailblazers). mark. provides a

unique earnings opportunity by tapping directly into young women's existing and daily

beauty rituals. The line of cosmetics and related products offers fun, fresh, modern

packaging; affordable pricing; and unique products offered in their own separate

"magalog," featuring editorial material pertinent to young women (Avon Mark).
       Avon has created its mark. product to look appealing to young girls in packaging

it in contemporary styles. The modern packaging is

one way Avon has attempted to entice young women

away from their traditional brands. Yet another factor

that contributes to the attempt of substitution is the

affordability of the products. Young girls tend to have

less disposable income so the low prices are very attractive when it comes to switching

brands. Avon‟s competitive advantage to other businesses is it direct selling approach,

which allows for interaction, relationship developments, and experiences that the

customer will remember. The direct selling approach enables Avon representatives to

hand out samples, interact with the customer and get to know each customer‟s tastes and

preferences. The direct selling approach further creates not only a loyalty factor to the

company, but to the representative. Purchasers may be reluctant to purchase anything but

Avon out of loyalty to their representative may he or she be a family member, close

friend, neighbor, or co-worker.

       Avon has advertised in Vogue, Cosmopolitan, InStyle and Glamour. They have

advertised on TV commercials, and just recently partnered with Allure, a beauty

magazine popular among teenage girls, to advertise its products (Mark). The magazine is

the beauty expert that recommends mark. products and gives beauty tips and secrets from

pros and celebrities. Magalog 9 is currently running a promotion that gives a full year

subscription of Allure magazine with a purchase of $20.00. Such partnerships introduce

mark. as a brand of selection and marks it as a hip and cool brand to have. This is vital to
getting the brand name out there so that young people become familiar with mark‟s

products and brand.



Metrosexual Market

                               Avon has always sought to increase sales by expanding its

                               network and consumer base. Recently, many studies have

                               revealed that men‟s products are a growing industry due to

                               the “metrosexual” trend. A more general study emphasized

                               that the male personal product/cosmetic world market was

about $3.5 billion (Eurostaf.fr). In response, Avon has launched its first cosmetics and

personal care lines exclusively for men. The launch of these products is an innovative

way for Avon to not only expand its customer base, but to also employ a new strategy for

marketing and sales. In the past, women have usually purchased the men‟s products for

their husbands, making them the actual target market. The new metrosexual line will

target men directly and increase the male customer base.

       The male beauty industry is confronting a few issues: First, the industry must

prove to the public that men‟s skin is different than women‟s skin (Rhythm of aging,

thickness, sebum secretion). Therefore, an investment in the R and D to give credit to the

product is essential in order to confirm a product‟s fast action and results.

       The next issue involves distribution of the product. Marketing must specifically

target males and take into account that male beauty is still somewhat taboo. Discreet

packaging may be necessary, except for perfume and toiletries, to ensure the men‟s peace

of mind that other men do not know they are using product.
       In this market we have three types of agents: leading beauty companies such as

L‟Oreal and Clarins, who are using the rollover strategy and care companies such as

Decléor, Phytomer and smaller individual firms (Eurostaf.fr).

       European companies have been seeking customers in this new market for several

years with Europeans appearing to be more willing to try new

things. Studies have revealed that most every man has tried on

at least one of these products, either because of a woman‟s

advice or on their own (Eurostaf.fr). But what are the main

issues in this market?      How can Avon create a brand

community for these men? We hardly see men gathering on

Sundays to talk about their skin or their hair: they would soon be considered homosexual

or odd. Avon and other companies have to face this prejudice when looking at their

products. According to marketers, there was a major shift in cultural attitudes that made

these products more acceptable for males (Agovino). For example shows like “Queer

Eye for the Straight Guy” and “Extreme Makeover” have reinforced the idea that paying

attention to grooming isn‟t just a feminine trait and some are saying that there is more

cultural pressure on men to look good. Sports tie-ins also seem to help in promoting

products; in fact, one Avon catalogue featured NASCAR driver Kasey Kahne, while New

York Jets quarterback Chad Pennington graced the cover of another.         Mass promotion

can also encourage the shift towards accepting male grooming and beauty. Many have

said that “as soon as they started using one product regularly it was very difficult to stop

using it, even if they had tried many different one before finding the appropriate one”
(eurostaf.fr). As the presence of women increases in men's social and working lives, men

have changed the way they act. This is a part of that shift.

       Birdie Jaworsky is an Avon lady that in the article Balls to the Wall, described her

search for ways to sell more products from the men‟s catalogue. Birdie knew that in

order to build brand community and connect with the men, she needed to attend a men‟s

event that would allow her to hobnob while presenting her products. Donning a very

short skirt and her highest pair of Avon heels, Birdie delved into the world of bowling

and attempted to ingratiate herself with the men. This type of selling was very new to her

but she was successful when a couple of men tried her products. Little by little, she

gained the confidence of one of the men, who a couple of days later called her to

purchase a cream he had tried. This was not a typical door-to-door sale for Birdie so

instead, she chose a location where she could capitalize on the servicescape.          She

attended an event where men were having fun and where they felt comfortable with each

other - bowling. Also, she was a part of the environment: dressing in a way that the men

wouldn‟t have let her go unnoticed. She used the environment and the new metrosexual

trend to expand her salary, and it worked.

       What future can we forecast for the metrosexual market segment? The trend

continues to grow: currently encompassing 25% of the US market. Albeit this trend is

quite recent, marketers have very high hopes about its evolution.          The strategies

employed to develop this segment are diverse, but building brand community can be

instrumental in its expansion. However, the main purpose cannot be forgotten: customer

satisfaction. Avon has bet a lot on this trend and will be launching two products lines
that appeal to the family man, career man and the athletes. It‟s crucial that Avon reach its

objectives in order to increase market shares.



Aging Women‟s Health

With American women showing a renewed interest in the overall health of their mind and

body, it is no surprise that a number of new products are being developed to satisfy this

demand. Avon is one of the leaders in the growing cosmeceutical industry and currently

offers an array of daily vitamins catered specifically for women‟s needs; everything from

mineral rich anti-aging skin crèmes to dietary supplements for menopausal women.

       The majority of the women fueling the increase in demand are part of an ever

growing segment of the population. Within the past decade, the number of United States

women age 40 and above grew from 40.4% to 44.6% in 2000 (U.S. Census).

Additionally, these women are avid for non-invasive alternatives to Botox and cosmetic

surgery, driving a "cosmeceuticals" market (Cosmeceutical Market Opportunities).

Cosmeceuticals, a combination of cosmetic and pharmaceutical, are products that include

ingredients designed not only to enhance the appearance but also to have a positive

physiological effect at the cellular level. According to the Freedonia Group, a leading

international business research company, this industry is destined to grow 8.5% to $5.1

billion by 2007 and is a real opportunity for Avon. Avon plans to gain market share and

build customer relationships in this industry by building communities at the product,

brand and company levels.

       Avon‟s customer-product community is strengthened from a number of sources,

but most noticeably from their tradition for quality and value. Avon was voted “Most
Trusted Brand” on three continents and has stated as one of its missions to be “world-

renowned for leadership in Beauty, with well-loved brands, products of the highest

quality, and an unmatched reputation for innovation and value”.         Consumers have

responded to Avon‟s commitment to quality and innovation with product loyalty.

Product loyalty is the cornerstone of an effective customer-product community and Avon

customers have demonstrated their loyalty to Avon with increased annual net sales.

       Other communities that Avon is building are the customer-brand and customer-

company communities, which strengthen the Avon brand name in the eye of the

consumer.    One of the avenues in which Avon has chosen to strengthen these

communities is cause marketing.      Cause-related marketing (CRM) is defined as the

public association of a for-profit company with a nonprofit organization, intended to

promote the company's product or service and to raise money for the nonprofit.

Corporations have been drawn to CRM due to the competition of the expanding global

marketplace and the need to develop brand loyalty (The Foundation Center). Avon has

chosen breast cancer as the inspiration for their cause marketing campaign and to date has

raised over $400 million.

       Breast cancer is the second leading cause of cancer deaths in women today (after

lung cancer) and is the most common cancer among women. In 2002, 192,000 new cases

of breast cancer were diagnosed in the United States and 40,000 existing cancer patients

succumbed to the disease. The number of annual breast cancer diagnoses is expected to

continually increase to estimates that in 2005, approximately 270,000 women in the

United States will be affected. This CRM for Avon is not only of societal importance for

women but also for the brand-building efforts of Avon. "The message in the United
States and across all of the countries (where Avon does business) is the same: We're

looking to position Avon as the company for women, whether that's the place to buy a

product, to start your own business, where your health needs are addressed (or) to

function as an advocate on behalf of women's health," says Joanne Mazurki, Avon's

director of global cause-related marketing (Fellman 4).

       The target market for Avon‟s cosmeceutical and wellness line of products is age

40+, coinciding with societal pressures for women to better maintain and manage their

health - with one of the recommendations being annual mammograms. Avon, due to its

commitment to raising awareness and finding a cure for breast cancer, is connecting with

their target market with the widespread distribution of Breast

Health Resource Guide and at events such as Avon Walk for

Breast Cancer. This commitment demonstrates Avon‟s genuine

concern for not only the female customers of Avon but also for

the betterment of every woman‟s health. Additionally, Avon enforces this allegiance not

only through marketing rhetoric but also with generous contributions and fund-raising

efforts by the Avon Foundation.      The Avon Foundation president Kathleen Walas

exemplified the impact CRM had when she said, “In 2005 the Avon Foundation reached

half a century committed to improving the lives of women. From an initial scholarship of

$400 in 1955, in 50 years we have exceeded $450 million raised and awarded for

women‟s empowerment and health, and we continue to work towards our goal to be the

largest foundation for women. The Avon Foundation has developed a special connection

with women and their communities” (Avon).
       Another way that Avon is building brand community is not only with prospective

and current customers but also within its sales people. “Avon ladies” are the heart and

soul of the corporation that not only solicit and build Avon‟s customer base but also

nurture and retain those relationships. Avon promotes itself as “the company for women”

and further enhanced this reputation with the introduction of the "Women of Enterprise

Awards" program. This program recognizes the independent spirit of women who have

succeeded in spite of personal or professional challenges, while risking so much of

themselves in their quest to successfully run their own businesses (Missiontrust). Each

year, the coveted award is given to six women entrepreneurs for their extraordinary

business achievements. This award program inspires both Avon ladies and women of

other businesses to be all they can be and believe in themselves. This belief perpetuates

itself into the everyday lives of women and contributes to the loyal patronage and selling

of the Avon brand. Additionally, Avon leads the female empowerment revolution with a

female CEO, Andrea Jung, who believes, “Women like myself, CEOs, can pave the way

for more women to get to the top” (Brainyquotes).



Emerging Markets and Globalization

Historically, Avon‟s profits have depended on economies where women stayed home.

The U.S. cultural ideologies that existed from Avon‟s inception 120 years ago and

throughout the fifties and sixties fit well with Avon‟s product line and direct selling

channel.   Avon provided American women a way to be in the workplace without

compromising family values and met a need for women that allowed them to network and

socialize with other women while earning money at the same time.            By selling to
neighbors and friends, they could supplement their families‟ income. In addition, it

allowed women without formal education and limited financial resources to own a

business. As American women traded in their roles as housewives and entered the formal

business workplace in the seventies, Avon lost customers as well as staffers. U.S. growth

declined and Avon looked internally to emerging ethnic markets as well as outward to

global markets for growth.

       America has been described as a great melting pot of cultures, which is evident in

all aspects of society, including Avon. Today‟s Avon representatives might be Russian,

Chinese or Brazilian. In 2004, this “army of direct sellers was responsible for $7.66

billion in global sales revenues” (Doonar 20). As the leading direct seller of cosmetics,

Avon‟s success in global and emerging economies has been attributed to the financial and

social opportunities that it provides women, the company‟s flexibility, adaptability and

the personal relationship it creates with its customers. “Avon is promoting its image as

„The Company for Women‟ by providing business opportunities for women in countries

where women have fewer choices” (Avon Products Inc).

       Critical to Avon‟s success in emerging markets is adapting to the cultural

ideology of that country or society. “Research shows that people tend to define their

social context locally rather than globally; they look to local sources of support for social

rewards, feedback, and identity.      Family, friends, and coworkers supply influential

feedback on personal consumption and provide a key basis for social comparison

(Coulter).

       Direct selling by sales representatives to family, friends, and co-workers is an

important strategy permitting Avon personal access to customers through people who are
familiar and identify with the same life themes and goals. This strategy enables Avon to

build customer-centric brand community in global and ethnic markets and in turn develop

customer loyalty and satisfaction. Research has identified five important elements in the

customer satisfaction process, (1) the product satisfaction process is active and dynamic;

(2) the satisfaction process often has a strong social dimension; (3) meaning and emotion

are integral; (4) the satisfaction process is context-dependent and contingent; (5) product

satisfaction is intertwined with life satisfaction and quality of life (Fournier). Direct

selling has enabled Avon to quickly move into ethnic and foreign markets, establish

important customer-company relationships and build relevant brand communities that

have created product satisfaction and life satisfaction for Avon‟s customers and profits

for Avon.

       Selling through personal networks is important especially in “traditional”

societies like the Hispanic and Latino cultures. “Interpersonal networks constitute

important mechanisms in these societies that strongly influence decision making

processes” (Korzenny).      Most purchases are made on the recommendations of

trustworthy persons usually “a family member, neighbor, someone perceived to be

expert” (Korzenny). In a culture where “Hispanic women, who often function as head of

their households, make many purchasing decisions for their families” (Miller), Avon is

able to penetrate these markets through sales representatives who are trusted members in

the community. Customer trust in the individual representative is then extended to the

product and the company, strengthening customer-company identification and in turn

creating satisfaction and brand loyalty. Evidence of this trust is reflected in the awards

Avon has won worldwide as the most trusted brand.
       With the U.S. Hispanic population growing by an estimated 1.7 million annually

and a current purchasing power estimated at more than $700 billion, this is a market

Avon is actively courting.      In 2002, Avon, upon recommendations of key sales

representatives, introduced a new color line catering to U.S. Hispanics. “Centered on

core cultural values, like family, tradition and religion, Eres Tu will also offer such

accessories as jewelry for first holy communions and quinceaeras, sweet 16-like

celebrations” (Davila). Because “we seek to express ourselves through possessions and

use material possessions to seek happiness, remind ourselves of experiences,

accomplishments and other people in our lives” (Belk 157), Avon‟s recognition of

pivotal, context rich moments creates satisfaction within the community and strengthens

the bonds between sales representative, customer and the company (McAlexander, et al).

According to sales representative, Maria Diaz, “Avon is celebrating a culture, not by our

differences, but by our contributions. The Eres Tu brochure is an excellent recruiting tool

for me…it binds us together as a culture” (Davila).

       Coordinated with the Eres Tu launch, Avon entered a strategic co-marketing

partnership with Latina Magazine. Avon features Latina Magazine in its brochure and in

turn, Latina Magazine binds the Eres Tu brochure in the magazine quarterly for the

duration of the multi-year deal (Staff). Avon has also partnered with its sales

representatives, agencies, business communities and engaged Latin movie actress, Salma

Hayek to promote awareness of domestic violence among Latinos, the global Avon

community and the public at large.        Through these actions, Avon cultivates C-C

identification by creating a customer-company identity that is culturally relevant and

trustworthy. They foster identity attractiveness through their spokesperson and embed
their sales representatives by including their suggestions in the strategic decision making

process and increase identity salience with Avon‟s involvement in cause marketing.

Consequently, the result is loyalty, recruitment and company promotion. Also, Avon

creates customer-centric brand community by developing synergies where “sharing

meaningful consumption experiences strengthens interpersonal ties and enhances mutual

appreciation for the product, the brand, and the facilitating marketers” cementing

relationships as well as brand loyalty (McAlexander, et al). Avon is also extending this

same attitude and strategy to its foreign markets.

       “In Brazil, beauty has always been more than skin deep - its big business.

Brazilians spend $3 billion annually on cosmetics, and Avon has long been the industry

leader” (Maxwell). In her article “Keeping Up Appearances”, Sarah Maxwell covers

Tracey Olsen‟s award winning student research project on Avon‟s impact on Brazil‟s

culture. According to Olsen, in a country where doctors and dentists are scarce, Avon

representatives are ubiquitous and represent all walks of life. Except for the U.S., Brazil

has more sales representatives than any other country in which Avon operates. While

part of Avon‟s success is linked to cultural expectations - beauty is valued and taught

from a very young age. What sets Avon apart from other cosmetic companies is its

flexibility and ability to adapt to the needs of the community. Brazilian women, due to

family considerations and workplace discrimination, are limited in job prospects. Avon

provides them an opportunity to sell to family, neighbors and acquaintances. According

to Olsen, “In very rural areas, women are allowed to barter for Avon goods. The

representatives accept eggs, gold and food in return for Avon products and sell those

products to pay their distributors” (Maxwell). Besides being welcomed for the product
they sell, Avon ladies are an important source of social information to women in rural

areas. Avon representatives show up regularly with their wares and brochures extending

brand community even to remote areas of the Amazon.

       Avon has thrived in the Eastern and Central European countries, including

Hungary, Romania and Poland. According to Jung, "One of our fastest-growing regions

of the world has been the entire Eastern European region. We've grown at 43 percent in

dollars compounded over the last several years, with 45 percent more reps every year. We

call it Avon heaven” (pbs).

       Direct selling was an advantage to Avon who entered this market in the nineties

when Central Europe was transforming from socialism to consumerism. A study of

women and cosmetics conducted in Hungary and Romania from 1989 to 2001 revealed

three findings (1) that ideological positions were key in whether informants used

cosmetics; (2) the product involvement was affected by the extent cosmetic use was

linked to key life themes and life projects; (3) cultural intermediaries were important in

the dissemination of Western beauty ideals, cosmetic brands and product, and beauty

instruction (Price). Avon quickly entered this market in 1991 with mass advertising,

enlisted hundreds of local women as sales representatives who lined up eager for the

economic opportunity, trained them to be beauty consultants and run their own

businesses.   Local sales representatives were able to target younger women who

embraced western influences and connected appearance and attractiveness to life themes

and goals such as being a good wife, being cosmopolitan and job advancement. At the

same time the representatives introduced Avon products to women who were more

reluctant to experiment with cosmetics and were uncertain how cosmetics were linked to
their personal lives.   Because sales representatives are often friends, neighbors, co-

workers, they meet people in their homes, create a fun, non-threatening atmosphere

where they can share beauty tips and sample the product. By establishing a one on one

relationship representatives were able to act as “cultural intermediaries”, facilitating

connections between Avon products, Avon Company and customers.                In addition,

consumer events were staged in major cities inviting women to preview product, receive

trial samples, learn about related beauty care and meet Avon sales representative and

sales managers.     These connections are important in creating C-C identification,

establishing brand community and brand loyalty; and perhaps, easing cultural change.

       Avon has also met success in Asian countries. Avon personal selling approach

has been a perfect fit in Asian countries where extended family kinship patterns and go-

betweens for contacts are important in social as well as business transactions. For

instance in Japan, one‟s junmyaku (network of human contacts) is everything. Avon has

done very well in Thailand where there is an inherent cultural bias of “obligation to one‟s

friend and the great difficulty of saying no when approached directly.” Once again, Avon

has adapted slightly for these markets including skin lightening products and altering

their distribution channel. When Avon discovered that it was not customary in some

Asian cultures for women to invite strangers into their homes, Avon opened beauty

centers operated by independent consultants and permitted sales by sales representatives

in retail settings. In addition, Avon modified its selling channel for China who banned

door-to door selling in 1998. Avon now has 5,700 beauty boutiques in China operated by

local independent people, in addition to 1,600 counters located in department stores or

with other retailers. China represents a tremendous growth opportunity in the cosmetics
industry having 20% of the world population. Avon‟s Chinese sales were $157 million in

2003, grew to $220 million in 2004 are forecasted at $600 million in 2007 (Avon). Avon

will resume direct selling in China with the Chinese Government‟s September 2005

announcement of two sets of direct selling regulations.         In preparation, Avon has

implemented a massive training effort readying supervisors who will recruit Chinese

representatives when their license is granted (Chandra).

       Avon‟s mission “To be the company that best understands and satisfies the

product, service and self-fulfillment needs of women – globally” is evidenced through

their customer-company interactions, brand community building, focus on satisfaction,

commitment to provide learning and financial opportunities to women, and their

willingness to adapt to meet these needs worldwide. Their direct selling strategy is still a

competitive advantage in emerging global and ethnic cultures where it provides an

economic opportunity for women. However as these markets become developed, Avon

will face similar challenges as it has in the U.S. retaining and recruiting the sales

representatives who are Avon‟s most important personal link to the customer.



Avon‟s Future

       Avon has come a long way from the traditional Avon lady with her pink pill box

hat and matching pink outfit from head to toe. Avon has emerged as the company for

women and has done so in a manner which empowers women in a number of ways.

Avon‟s projections indicate a major restructuring of the company that includes

downsizing to restore growth. Avon just recently experienced an 8.16% decrease in

share price due to a weak year where heightened competition, increased rivalry, and a
fragile economy somehow seeped through Avon‟s doors.             Andrea Jung has also

recognized a lapse between senior management and consumers and plans to “de-layer”

the company as to unify ties between key decision makers and the customer

(D‟Innocenzio).

       Yet another foreseeable item that Avon sees in the future is the role women have

in executive positions. Jung hopes to be an example to all and has set a standard of

empowerment for women everywhere. Not only has Avon empowered women through

its overall mission and values, but by example. “In the next 10 years, Jung said she

believes there will be a comparable exponential change in the number of women in top

positions across all of corporate America (Women in Business).

       Business looks optimistic for Avon‟s future and Andrea Jung and Susan Cropf are

equally confident in the future of Avon. “As we look forward to celebrating Avon‟s

120th anniversary in 2006, Avon‟s star is shining more brightly than ever. Our journey of

transformation continues. We have bold, exciting dreams for the future and we are on a

mission to improve women‟s lives. For Avon, truly the best is yet to come.” -Andrea

Jung and Susan Cropf
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