Avon Products, Inc.

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Demographic

In 1987, after being petitioned by the National Women’s History Project, Congress officially designated the month of March as “Women’s History Month.”

Based on census comparison of population by sex and age in the 1980s versus that of the 70s, there is a large increase in population noted between 25-29 and 30-34 age bracket, were women has slightly outnumbered men in the said age bracket.

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Figure 1. 1980 and 1970 Population by Age and Sex

For comparative purposes on the current world sex ratio, women versus men, below is a map with 2006 data, showing the growth of percentage of women outnumbering men all over the world.

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Figure 2. World Sex Ratio of Total Population per Country (2006 data)

Socio-Cultural

The 1980s saw the rise of the “Yuppie” Era, which is a slang term denoting the market segment of young urban professionals, characterized by youth, affluence and business success.

In an online article on the history of yuppies, they have noted that after the Stock Market Crash of 1987, the term yuppie became less political and gained more of the social implications it has today. By the 1990s, the term’s usage decline.

- Market Profile and Outlook

The market for selling beauty products has initially declined as a result of women leaving homes to take on jobs in the corporate world; however, the outlook for the market remains bright as indicated in the jump in revenues as additional distribution and sales channels become available. The increase in the number of women in the corporate world only highlights the increased need of women for these beauty products – a potential market that Avon can capture through product innovation and differentiation and improved marketing channels.

- Competition

Competitors include Mary Kay, also a dominant direct-selling firm which sells cosmetics. Several other firms that sell cosmetics and personal care products through retail stores are Procter & Gamble, Co., Unilever and Revlon, Inc.

- Technology

Technology soared in 1980s, described as the decade that with surprising inventions and technologies that define life today.

Inventions includes the Personal Computer, CD & Walkman, and even the Cellular phone, in an online article on “how the 80s Technology made the Modern World”, they have noted that in 1987, In 1987's Wall Street, early adopter Gordon Gekko made a wireless call from the beach and cemented the mobile phone as an '80s icon.

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Resources

- Corporate Franchise

Avon is engaged in manufacturing and distribution of beauty, home improvement and related products. The Company has sales operations in various countries and territories, including the US. Additionally, Avon distributes its products in 43 other countries. The Company's business is divided into four segments on a geographical basis: Latin America; Europe, Middle East and Africa; North America; and Asia Pacific. At the same time, it has centralized operations for global brand marketing and global sales, and also has regional operations for marketing, sales, and supply chain.

The Company became famous for its direct selling beauty business, in which the sales force of independent contractors/sales representatives purchases products from Avon and then resell them door-door, largely to their friends, relatives and neighbors.

Among the guiding principles of Avon during its early years is to provide individuals an opportunity to earn in support of their well-being and happiness, and to give full recognition to employees and representatives, on whose contributions Avon depends.

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- Shareholders and Key Officers

The case presented the following officer of Avon Products, Inc.:

Mr. Hicks Waldron – Chairman and CEO

- Marketing Profile

Product

Avon’s core operation is in its main business line – beauty products, which include the following products:

- Cosmetics

- Fragrances[pic 10]

- Toiletries

- Fashion accessories

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Price

The case did not present any details regarding the price strategy employed by Avon. In general, pricing is varied according to products and the market it caters.

Place and Distribution

In 1988, Avon had 1.4 million active sales representatives worldwide, including 400,000 in the United States. During 1950’s Avon expanded overseas to countries such as Puerto Rico, Cuba and Venezuela.

Demographic Shift

In the 1980’s an important demographic shift was beginning to threaten Avon’s Beauty Group. The majority of Avon’s sales representatives and their customers had traditionally been women who spent much of the day at home. Increasingly, these women were entering occupations that required them to be away from home during the day, therefore, Avon was losing both its sales force and its customers.

Currently, Avon has four global divisions: North America, Latin America, Europe, and West Asia and Asia Pacific, and operating in 143 countries worldwide.

Promotion and Advertising

Promotion and advertising of Avon is not specifically mentioned in the case. It may be assumed, however, that the Company is doing extensive