RESEARCH ON MARKETING STRATEGY OF COSMETIC COMPANY

1. PROJECT REPORT
ON
RESEARCH ON MARKETING STRATEGY OF COSMETIC
COMPANY – AVON
M.COM – I ADVANCED ACCOUNTANCY
2015 - 2016
SUBMITTED BY
KAVITAKE CHHAYA LAXMAN
ROLL NO –A/24
PROJECT GUIDE
PROF. DR. AMIT PRAJAPATI
SUBJECT: STRATEGIC MANAGEMENT
People’s Education Society’s
DR. AMBEDKAR COLLEGE OFCOMMERCE AND ECONOMICS
WADALA, MUMBAI- 400 031.

2. ACKNOWLEDGEMENT
I hereby acknowledge all those who directly or indirectly helped me to draft the
project report. It would not have been possible for me to complete the task without
their help and guidance. It is my great privilege to thank Dr. Ambedkar College of
Commerce and Economics.
First of all I would like to thank the principal Dr. S.R Kamble and the coordinator
Prof. Sanjay H. Khaire who gave me the opportunity to do this project work. They
also conveyed the important instructions from the university from time to time.
Secondly, I am very much obliged of Prof. Dr. Amit Prajapati for giving guidance
for completing the project.
I am thankful to all those persons who co-operated with me. They not only
rendered time out of their busy scheduled but also answered my queries without
hesitation.
I must mention my hearty gratitude towards my family, other faculties and friends
who supported me to go ahead with the project.
Place: MUMBAI
Date:
(Signature):

3. People’s Education Society’s
DR. AMBEDKAR COLLEGE OF COMMERCE AND ECONOMICS
WADALA, MUMBAI- 400 031.
CERTIFICATE
This is to certify that, Miss. Kavitake Chhaya Laxman of M.Com - I
Advanced Accountancy Semester I (2015-2016) has successfully
completed project on Research on Marketing Strategy Of Cosmetic
Company – AVON PRODUCTS under the guidance of Prof. Dr. Amit
Prajapati.
(Principal) (Co-ordinator)
(Project Guide) (External Examiner)

4. DECLARATION
I Miss. Kavitake Chhaya Laxman the student of Dr. Ambedkar College
of Commerce & Economics, studying in M.Com – I Advanced
Accountacny (Semester I), hereby declare that I have completed the
project report on on Research on Marketing Strategy Of Cosmetic
Company – AVON PRODUCTS in the academic year 2015 – 2016.
The information submitted is genuine and practical to the best of my
knowledge.
Place: ______________
Kavitake Chhaya Laxman
( Roll No.A/24)
Date:_________________

5. Index
S.no Listofcontent Pageno.
1 Introduction
 Industry profile
 About the Business
 Futureof AVON industry
 History ofAVON
 Top COSMETIC Company
 Product Line ofAVON
 Marketing Concept
 Marketing Strategy of AVON
 4 P’s
1 -2
3
4 – 5
6 -7
8
9
10 -11
12
13–15
16-22
2 Analysis
 SWOT Analysis
 PEST Analysis
23 – 25
25 -28
3 Literature Review 29 -30
4 Market segments 31 -32
5 Research Methodology & Result 33 -35
6 Competitors & Target 36 -37
7 Recommendation 38 -39
8 Conclusion & Proposal 40 -41

6. Introduction
This Project is Research of Marketing Strategy of the company which is
active on the cosmetics market. I have realized the case study about the company
Avon Cosmetics Romania. I chose this company because it is one of the largest
and well known cosmetics producers in the world, operating in direct sales system.
It is therefore, extremely important the role of the representatives, the way they act
and persuade potential customers. Also the rapid growth and company’s image on
the market impressed me and made me tackle this topic. In this Project I want to
determine the position of the company in the market, to show the Process of
Marketing Strategy and show the importance of the Company. These are some of
the objectives that I want to reach by realizing this project.
Avon Company is present in whole world, in over 143 countries and it has
over 3.7 millions of representatives. The company respects the international
standards for the environment, so that its activity is not harmful for the
environment. It was the first company that eliminated from its product’s
composition the CFC gases (chlorofluorocarbons) – gases which are harmful for
ozone blanket. Almost all packaging is recyclable.
The market target for Avon Company is situated in urban area and is
represented by persons aged between 35 and 45 years old, with higher education,
who are interested in cosmetics and who have medium and big incomes. They are
strong, professional women, educated, independent, and interested in the way they
look. These are persons who can appreciate better the products and are attentive to
every detail. Another aim of this paper is to reveal the main competitors and to

7. point out the clients’ satisfaction degree regarding product range complexity and
product distribution process.
Avon Cosmetics is one of the largest and well known companies producing
cosmetics in the world and operating in direct sales system. The company was
founded in America in 1886, by David McConnell, a book seller who was offering
samples of perfume with his books.
Avon Products, Inc. is a global manufacturer and marketer of beauty and
related products. The firm groups these products into three categories: Beauty,
consisting of cosmetics, fragrances and toiletries; beauty Plus, made up of jeweler,
watches, apparel and accessories; and Beyond Beauty, with home products, gifts,
candles, and other decorative items. The company sells makeup under the Avon
Color and Beyond Color brands; skincare products under Anew and Avon
Solutions; bath and body products under Avon Skin-So-Soft and Naturals; hair
care products under Advance techniques; supplements and therapeutic products
under Avon wellness; and fragrance products under Avon Fragrance.
This report analyzes the marketing environment and the different marketing
strategies that Avon employs. The author also intends to present suggestions in
marketing.
Avon Cosmetics Romania SRL was founded in 1997 and then were
registered the first 6 Avon representatives, who were the first sales directors in
Romania. Avon is the largest company of cosmetics, operating in direct sales
system and its achievements in the world are:
 Over 3.7 million representatives in entire world
 Over 143 countries in which is operating

8. INDUSTRY PROFILE
"Avon calling" -- calling for a younger crowd, overseas reps, and improved
global operational efficiencies. Avon Products, the world's top direct seller of
cosmetics and beauty-related items is busy building a global brand and
enticing more consumers to buy its products. Direct selling remains itsmodus
operandi; sales also come from catalogs and a website.
Its lineup includes cosmetics, fragrances, toiletries, apparel, home
furnishings, and more. Avon boasts more than 6 million independent
representatives worldwide. With sales and distribution operations in more than
100 countries, nearly 90% of sales come from outside the US. Avon is working to
transform its business amid falling sales and profits.
The company's products are sold through catalogs, mall kiosks, its prestigious
day spa in Trump Tower in New York, the Internet, and in J.C. Penney stores. Its
products are also sold directly to customers in nearly 143 countries by 3.5 million
independent sales representatives, making Avon the number one direct sales
company in the world.

9. ABOUT THE BUSINESS
Avon" –it's a common name which is found everywhere. Whether it is
individual or company everyone wants to be a-1. Whether it is cosmetics or
bicycles or dress materials the name is common. But still there are some questions
of its infant stage in india specially gujarat like
* WHY IT IS NOT POPULAR?
* WHY IT IS STILL PRIVATE LIMITED?
* WHY THEY HAVE NOT TARGETED THE RURAL MARKETS OF INDIA?
* WHY IT IS CALLED THE COMPANY OF WOMEN?
Sometimes we are hearing that " a women is the door of narka" or "the mind of
the ladies is on the joints of legs" or "women are fools". on the another side, "yatra
naryastu pujyante ramante tatra devatah" which one is correct? why a women nee
ds sacrifice/ kills/ raped/used as a tool for success?
As being a women have you ever thought about the freedom, success, own
identity, fighting spirit against child and girl amusement, child marriage, health
and nutrition problems? it is said that one women is the enemy of another women

10. and can not see others growing. same way most of us have no thought except being
mother, daughter, bhabhi, sister, sister in law, daughter in law and following the
traditions.
The opportunity is in front of us but we have not thought. Avon means
A- Admiring and adorable
V- Vision
O-Opportunity
N- Nearness and nice
It is called company of women which has given all of the above things to the
women who have connected with them. They have made them independent, good
earner, socialites and creator of good vision and personality.

11. FUTUREOFAVON INDUSTRY
In recent years, Avon’s U.S. business has struggled to adapt its direct
selling model to the realities of modern life. Last year, Avon completed the first
major overhaul of theavon.com website in 10 years, but it is now contending with
nimble e-commerce rivals such as beauty online retailer Birch box.
Avon’s offerings, generally lower-end, must also compete with vastly improved
offerings at brick-and-mortar retailers such as Target TGT , Walgreens,
Kohl’s KSS and J.C. Penney JCP , which has Sephora boutiques at hundreds of
its stores. Some of the pain has come from confusing customers about what it
stands for. Just a few years ago, Avon unsuccessfully tried to add higher-end
products as well as silver jewelry to its line-up. The move was a total flop.
Efforts under Sheri McCoy — a Johnson & Johnson executive who took the reins
in 2012 — to fix Avon’s U.S. problems have not worked. Avon has struggled to
make its commission structure competitive with that of competitors such as Mary
Kay Cosmetics. One big failed effort was the cancellation a couple of years ago of
a big software upgrade that had been designed to make tracking orders and
compensation easier for reps.

12. While many on Wall Street have clamored for years for Avon to consider
exiting the U.S. business altogether to focus on more promising markets such as
Brazil, Russia, and Mexico, McCoy told Fortune last year that success in Avon’s
home market was too important: “To not compete in one of the largest markets in
the world doesn’tmake sense. It’s the founding country of the brand; there are a lot
of roots to the brand,” she said in September.
What’s more, going the retail route is not that simple either, given that
the company has no systems in place to sell to stores. It’s hard to see anything
encouraging in Avon’s North American sales, particularly as the business is clearly
unprofitable, losing $132 million in the last two years.
“Avon needs to do something big. This may be too little, too late,” said Ali Dibadj,
a Sanford C Bernstein analyst. “They’ve been throwing good money after bad for
years.”
Until last year, Avon could at least find some solace overseas, with
promising numbers in some markets. But revenue in Latin America (Brazil is
Avon’s biggest market), Europe, and Asia (Avon’s bribery scandal in China
destroyed its business there, erasing a lead it had gotten by being the first U.S.
direct seller) all fell last year. (To be fair, Avon has said the strong U.S. dollar was
behind a lot of that.)
Three years ago, when Avon urged shareholders to reject Coty’s
unsolicited bid, the company’s board argued that they would get a better return by
giving the newly appointed McCoy a chance to fix a company left in a shambles by
her predecessor Andrea Jung. But fast forward to now, despite all the time McCoy
has had, the company is in worse shape. Its revenue is down 22% over a 3-year
period to $8.8 billion, and the company is struggling to compete with aggressive

13. competitors in places such as Brazil. It’s hard to argue McCoy has not had enough
time to at least stabilize the ship.
“Avon gets more grief from equity analysts than any company we’ve
ever followed and it’s no wonder. Management continues to claim they know
what’s wrong and how to fix it, yet results continue to languish,” said Carol
Levenson, director of research, at Gimme Credit, an independent research service
on corporate bonds, in a research note.
History of avon
“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

14. 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 (idea finder).
THETOPCOMPANIESWHICHAREPOPULARINTHECOSMETICS
* EMAMI
* GODREJ
* AVON
* P & G
* HUL
* HIMALAYA
* ITC
* KAYA SKIN CLINIC
* AMWAY
* LAKME
* REVLON
* ORIFLAME
* AYUR

15. * VLCC
* LOREAL

16. AVONPRODUCTLINE
The company has a broad and panoptic productline which fulfils the
consumers' desires of purchasing the commanded goods.
Avon Productline is described as follows:
MAKE UP
It consists of the products applied to alter and modify the appearance without
having an effect upon the functions with the purpose of enhancing beauty and
attractiveness e.g. lipstick, nail polish, eye shadow, foundation, powder, etc.
SKIN CARE
Skin is a part of the body which gives shape to the beauty of a person and
for a company like Avon, which emphasizes on the aspect of beauty with glamour;
it can't ignore the skin care product line. Major products that Avon provide within
this area are: cleansers & toners, eye care, moisturizers, problem solvers, anti-
aging, skincare.
BATH & BODY
Avon look after the bath and body products with extensive care as it soften
and lightens the skin and give a glow to it with beautiful fragrance which gives a
pleasant feeling. It includes (body lotion, hand cream, bath & shower, body sprays,
foot care, sun care, depilatories, bath & body).

17. HAIR CARE
A wide range of products which are Perfect for all hair types(shampoo &
conditioner, treatments, brushes)
AVON WELLNESS (home environment, fitness, Wellness Specials)
FRAGRANCE:
GIFTS & FASHION (Gifts, jewelry, apparel, accessories, inspirational treasures
etc. apparel jewelry accessories
OUT DOOR PROTECTION:These products prevent the skin from the
exposures in the sun (self-tanners', suntan lotions, insect repellents, children's)

18. Marketing concept OF AVON ?
Marketing in a nutshell, is defined as the art of selling products. However,
marketing does not only aim to sell products. It involves a deep understanding of
the customer and identification of products or services that will satisfy their needs
and wants. Marketing according to Bradley (2003) is a philosophy that leads to the
process by which organizations, groups, and individuals obtain what they need and
want by identifying value, providing it, communicating it and delivering it to
others. Marketing is strategically concerned with the direction and scope of the
long-term activities performed by the organization to obtain a competitive
advantage. This paper generally, looks at how marketing is employed in Avon and
how Avon creates its marketing strategies. Avon presents an excellent case in
marketing because of its innovative business philosophy. In the succeeding
sections, the author intends to tackle the different marketing techniques of Avon.
Marketing concept was founded in 1957 by Jhon B. Mc. Kitterick (CEO
General Electric): marketing concept is the philosophy of consumer orientation,
philosophy which implies integral and coordinated actions and reaching a certain
goal .The most basic concept underlying marketing is that of human needs. Human
needs are states of felt deprivation. Wants are the form human needs take as they
are shaped by culture and individual personality.
When wants are backed by buying power they become demands. Marketing
definition is based on the following concepts: needs, wants, demands, markets,
change, transaction and relations, satisfaction and value, products, services and
experiences.

19. Marketing Strategies
This section discusses the different marketing strategies that Avon employs
in order to reach its customers and to encourage customer patronage and loyalty;
The Company has diverse marketing strategies.
 Direct-Selling
A major characteristic of direct selling is the personal contact between a
sales person and a consumer, away from a retail store. Avon implements the door-
to-door selling type of direct selling. Avon uses freelance salespeople or agents to
visit people in their own homes and to demonstrate and explain the use of a range
of beauty products. Direct-selling provides important benefits to individuals who
desire an opportunity to earn an income and build a business of their own. It offers
the prospect of self-determination and financial independence.
It also offers an alternative to consumers who want something different
from the traditional shopping centers, department stores or other forms of
conventional shopping. It offers an alternative to traditional employment for those
who desire a flexible income-earning opportunity to supplement their household
income, or whose responsibilities or circumstances do not allow for regular part-
time or full-time employment (Lancaster and Reynolds 2000).

20.  Product Trial and Sampling Events
Avon is popular for its product trial and sampling events. Avon uses events
to encourage trial of its products among non-users and to encourage further
purchases from existing customers. These events include demonstrations and
sampling presented in supermarkets, shopping malls, and other locations where a
big number of the desired target market can be reached.
Avon focuses on product trial events as one of its forms of communication
with the end customer. Its representatives, agents or distributors are recruited from
their target markets and are encouraged to hold parties or events within their homes
to offer friends and acquaintances the opportunity to try, feel, use the products, to
interact with it in an experiential setting (Masterman and Wood 2006).
Marketing Research
Research in general con notes a systematic and objective investigation of a
subject or problem in order to discover relevant information or principles. It can be
considered to be primarily fundamental or applied in nature. Fundamental research,
frequently called basic or pure research, seeks to extend the boundaries of
knowledge in a given area with no necessary immediate application to existing
problems.
Applied research, also known as decisional research attempts to use existing
knowledge to aid in the solution of some given problem or set of problems.
Marketing research is the systematic and objective search for and analysis of,

21. information relevant to the identification and solution of any problem in the field
of marketing.
The marketing research at Avon is directed towards gathering information
from the customers in order to develop products and services that will satisfy the
needs, wants and demands of the customers. The marketing research also aids in
directing the marketing strategies of the company. In general information are
gathered from the customers through surveys (sometimes in the form of customer
feedbacks or suggestion form) (Smith and Albaum 2005).

22. STUDY OF AVON WITH RESPECT TO 4 P’S
Achieving a favorable position in the minds of the consumers and making
the product or service attractive to the target market entails careful formulation of
the marketing mix. Getting the right mixture of the product, promotion, price, and
distribution is important in marketing.
The goal of the marketing mix is to portray an image for the product or
service that will match with how the organization wants the product or service to
be visualized in people’s minds. Marketing mix according to Kotler (2001) is the
set of marketing tools that the firm uses to pursue its marketing objectives in the
target market.
 Product – The products or services of an organization help in creating an
image of the firm in the mind of the consumer. This image is reflected in the
customer’s perceptions and feeling about its products or services. The product
is the element in the marketing mix that includes all of the issues surrounding
the development of the product or service.
 Price – where market demand and the cost of producing the product or
service come together and determine the profitability or lack of it.

23.  Promotion – Promotion is consist of all of the methods of
communicating the product offering to the target market, such as advertising,
publicity, and sales promotion.
 Place – Place is the task of getting the goods to market.
1.Product
Avon is considered as the world’s largest manufacturer of cosmetics,
fragrances and toiletries. Avon’s core offer consists of competitively priced beauty
products and gifts. Lisa Midyett, director of world marketing project for Avon
spoke about Avon new product development process that has put an effect on
process of forming ideas to the execution process.
The company entered into a new project four years back when Avon had
clearly separate process of development for each country they were carrying their
business operation. They planned to work on globally-aligned process which
would work in the same manner for everyone but later implemented a process
which had some drawback too and required a lot of administrative and
management work which company found ineffective and wanted to focus on
innovation rather than spending time in management.
2.Price
Avon markets most of its products at moderate price points in relation to
the industry. Discounts and price reductions are offered periodically. New brand
extension products are priced at approximately the same price as the original

24. brand. Although many respondents were not serious about the Avon price issues
and as a matter of fact, many of the girls thought that the price of the product are
mutually and logically connected to the quality.
Since their faces are something that represents them, hence they wanted the
perfect cosmetic for adding value to their face beauty because it represents them
how they want to see themselves (Beasley, 2007)
.
3.Promotion
Sales promotion and sales development activities are directed at assisting
sales representatives through sales aids like brochures, productsamples and
demonstration products. Inorder to supportthe efforts of sales representatives to
reach new customers, specifically designed sales aids, promotional pieces,
customer flyers, television and print advertising are used. A number of
merchandising techniques are used, including the introduction of new products, the
use of combination offers, the use of trial sizes and samples, and the promotion of
products packaged as gift items.
In general, for each sales campaign, a distinctive brochure is published, in
which new products are introduced and selected items are offered as special
promotions or are given particular prominence in the brochure. The Company
follows a pull strategy as they don'tput pressures on the retailers and distribution
channels to provoke customers to buy their products instead they focus on
promoting their company through advertising and through other forums of sales
promotion. Advertising this way itself creates an emotional charm that helps the
consumer to select the productthey are looking for.

25. SPECIAL PROMOTION EVENTS:
Brochures: It is the main important marketing instrument used by Avon (Kumar,
Massie and Dumonceaux, 2006).
TVs, magazines and Radio announcements
Product sampling: They give productsamples sometimes so that consumer may
use them and try before making a purchasing decision.
Bulletin boards: Representatives leaves their telephone numbers on the board to
contact them with a few words written on it to attract customers.
Discountcoupons: Company gives discount coupons sometimes on the purchase
of Avon products.
Gifts: To please customers and attract them, the company offers small gifts to
them.
ONLINE ADVERTISING:
Avon.Com gives consumers the knowledge about the company's product
promotions that tempts and attracts a consumer to purchase products at discounted
prices.
myavon.co.uk/earn with: This is for the personwho wants to work for Avon.
www.AvonShop.co.uk: Free delivery if a person shop more than 20 pounds (Avon,
2010)
Social Networking websites: They try to promote their productusing social
communities such as facebook, twitter and my space

26. SLOGAN AND JINGLES
 Avon Calling
 The Company for Women
 Avon is made with you in mind
 Avon is For life's unforgettable moments
UPGRADING THE BRAND IMAGE:
Job fairs: Avon organizes a Job fair for the people who are unemployed and wants
to work for Avon and have high interest to serve the company.
Corporatesocial responsibility- contributes in well being of the society and its
environs. Mainly focused on women issues, empowerment and health.
(Eikenberry, 2009)
4.Place
Avon is the pioneer of direct-selling approach in the cosmetics industry.
Avon reaches its customers primarily through its traditional distribution channel
made up of a network of 3 million independent sales representatives. The network
spans 140 countries over six continents.
The vast majority of the representatives are women and all are rewarded on
a commission-only basis (Christopher and Peck 2003).
Avon reaches its customers primarily through its traditional distribution
channel made up of a network of 3 million independent sales representatives. The
network spans 140 countries over six continents.

27.  RETAIL CHANNELS: Company hires the independent sales
representatives to market their products which are not the workers of the
company but neutral dealers. As soon as they receive orders from the clients
they send on the request to the nearest distribution centre of Avon and are
then delivered to the representative by local delivery system.
 ONLINE: Consumers can buy the products online from Avon website :
www.Avon.uk.com
 Positioning
In this section, the author will discuss the position of Avon in the market
and in the minds of the customers. Positioning is a very important topic in
marketing as it provides information to the company on where they are now and
how they are faring compared to their competitors.
Positioning refers to the decisions and activities intended to create and
maintain a firm’s product concept in the customer’s minds. Market positioning
amounts to arranging for a product or service to occupy a clear, distinctive and
desirable place relative to competing products – in the minds of target customers
(Proctor, 200). Positioning is the process of distinguishing a company or product
from competitors along such dimensions as product characteristics or values that
are meaningful to consumers.

28. Positioning strategy aids customers in evaluating product attributes that are
of significance or value to them (Michman et al 2003). Once the segment is
determined then a decision has to be made as to how to position the product. The
idea of positioning is to find out how the consumers/ consumers in particular
segments are going to perceive the productand service and the company’s message
about these products and service (Kermally, 2003).
According to Paley (2006), positioning is not what you do to a product, it is
what you do to the mind of the prospect. Positioning is the act of designing the
company offer and image so that it occupies a distinct and valued place in the
target customers’ minds.
Image is extremely important to Avon. The company maintains the position
as the world’s leading direct seller of beauty and related products. Avon embarks
on expanding new marketing opportunities without disrupting the current direct
sales.

29. ANALYSE THE MARKETING ENVIRONMENT
In this section, two marketing environment analysis tools will be used in
order to analyze the marketing environment of Avon. These tools are SWOT
analysis and PEST analysis.
1. SWOT Analysis
The SWOT analysis is intended to provide brief and concise information on
the strengths and weaknesses of the company as well as the opportunities and
threats it faces. These information are important in crafting the marketing
strategies of the company as they give direction to which the strategies must be
focused.
Strengths
 Marketing strategies vary from country to country designed to meet
the unique demands and culture of each geographic region
 Strong financial position in the international market
 Established customers and those in developing markets offer the
greatest potential for increasing the company’s customer base
One of the highlighted strengths of the company is the fact that Avon is the most
popular brand of beauty. This thing offers the necessary notoriety and confidence
to the company. Also the expanded number of representatives is an important
strength. Avon has over 3.7 million representatives in the entire world and over

30. 100000 in Romania. With such a big number of representatives it is a certainty that
the company reaches the ears of every woman
Weaknesses
 Erosion of the core customer base in the United States
 Poor marketing and advertising strategies in the United States and
abroad
 Products are not easily accessible
I consider that the main weak point is represented by the differences between the
nuances of the products shown in catalogs and the product itself. Also Avon
Cosmetics Romania doesn’t update the brochures in the same time with those from
outside the country. The possibility to return the products is a weakness because
the procedure is very complicated.
Opportunities
 People in developing countries have more money to spend
 Middle-class families in developing countries are increasing in
number
Among the opportunities of the company we mention: convenient quality – price
ratio, all Avon products presenting the benefit of: “100% guarantee”. Also there is
the chance to develop your own business and to earn extra incomes. An extremely
important opportunity is to supportvarious social campaigns: breast cancer,
violence in family etc. Also the company can improve its knowledge in beauty

31. domain and not only. Another opportunity is to launch on the market qualitative
products with an advanced technology.
Threats
 High interest rates in some countries
The threats of the company are firstly connected with the competition, with the
increased number of suppliers. The technology used by the competitors may
represent a threat, the company being in a continuous development.
2. PEST Analysis
A PEST analysis looks at the Political, Economic, Social and
Technological drivers of a particular industry. PEST are external factors that must
be analyzed and understood in order for an organization to succeed. The PEST
analysis focuses on the external forces that affect the organization. It is most useful
when used together with other tools such as the SWOT analysis.
Political
 Political Factors – May have direct or indirect impact on the organization’s
operation. Decisions made by the government may have an effect on the
business. The political arena has a big influence on how organizations
operate the purchasing power of the customers and other businesses. As

32. Avon is based in U.S we have to focus on the relationship between both
Country which is uniquely close and they share enormous trade and
economic relations. Both are top trading partners of each other hence the
business relations of both the countries are strong and have wielding power.
Also the trade bonds and affiliations are strengthened (U.S foreign policy,
2010)
Avon uses its websites to market its products worldwide they have to follow
the copyright policy of the United Kingdom. UK Government recently came
up with the Consumer Protection (Distance Selling) conditions in order to
protect consumers which are buying online and have no direct control with
the seller. These Regulations are only applicable to the users that purchase
commodities or services from a business and not if it is business-to-business
purchases.
Economic
 Economic Factors – The organization is affected by economic factors.
Economy also affects the purchasing power and behavior of the consumers.
The economic ups and downs such as state of the economy declines called
recession does change the demand for productwhich is coherent over the
years because in that time women go through the hard times and get
stressed. In that mental strain period their skin gets affected due to burden
and pressure hence they spend money on buying make up to look good and
fresh. Recent report also indicates the figures for the demand of makeup and
cosmetic in U.K has gone up from 4.7% to £15.6bn. This clearly shows that
in recession the demand of the productincreases (Cosmetics business,
2008).

33. Sociological
 Sociological Factors – Include the demography, lifestyle, cultural
aspects of the consumers. These factors have a big influence on the
consumer needs and wants. Sociological factors also affect the size of
potential markets. The important category and class of economy is the
fashion industry of UK because it has an increasing and growing
consumer's interest. In order to increase more customer awareness about
the brands and products introduced by the company Avon should
understand about the expansion of the brands existence.
Avon marketing practices are undergoing a change to become
progressively focused on a bond and connection with the customer;
because Participants felt the image of Avon is not positively reflected
by its advertisements and Avon representatives. Although the cosmetics
industry is boosting sales by bringing the products that cater to the
needs and desires of people with particular ethnic backgrounds, skin
and hair types, and genetic characteristics, many customers are not
aware of the brand promotions and its existence in the market.
Technological
 Technological Factors – technological change plays an important role in
shaping how organizations operate. Technological factors are important in
gaining competitive advantage. Technological innovations can improve
production efficiency, quality and speed. New technology is changing how
organizations operate. The new advanced and modern methods are being

34. used these days in order to pace up the existing share of the cosmetic
company in the market.
Hence technology is used fully to align and compete in the market of
toiletries and cosmetics. Forinstance, the virtual make up options available
online on the websites of the company gives an actual effect which has also
helped Avon to take over the region with the help of e-commerce;
accelerating in this field to get the maximum attainable share (Kumar, 2004).

35. LITRETURE REVIEW
It's a bond forged by everything from shared causes to biology, tracing back
through more than a century of beauty and business opportunity. And as we stride
past the threshold to the next hundred years, that natural affinity is strengthened by
energetic new initiatives, a bolder vision, and a wider, more diverse community of
customers. In a dynamic new world, Avon continues to connect, reaching women
through a vibrant image and outstanding products, personal relationships, cutting-
edge technology, exciting new channels, and unparalleled support for gender and
family issues. When we say we're the Company for Women ... we mean it.
The oldest beauty company in the United States, Avon Products, Inc. has
grown from a modest line of perfumes sold door-to-door to one of the world's
leading brand of cosmetics. It manufactures and sells cosmetics, fragrances,
toiletries, accessories, apparel, and various decorative home furnishings. Avon
employs a unique direct-selling method, which was greatly responsible for its
incredible success in the 1950s and 1960s, when women were easily found in the
home for sales purposes. After unsuccessful efforts at diversification into the
health-care service industry left the company with massive debts in the late 1980s
and early 1990s, Avon began to refocus on its roots: beauty products and direct
selling. The company's products are sold through catalogs, mall kiosks, its
prestigious day spa in Trump Tower in New York, the Internet, and in J.C. Penney
stores. Its products are also sold directly to customers in nearly 143 countries by
3.5 million independent sales representatives, making Avon the number one direct
sales company in the world.

36. The Indian cosmetics industry is in churn. Even as the premium segment is
getting crowded, the rural market is turning out to be the stronghold of smaller,
regional players. Although stiff competition has emerged for Lakme Lever within
the Rs 250-crore colour cosmetics market, it continues to lead. In the skincare
market, estimated at Rs 700 crore, Lakme's market share averages 7-8 per cent.
Catalyst spoke to Anil Chopra, Lakme Lever's Business Head.
Russo and France (1994), studied the nature of the choice process for commonly
purchased nondurables by tracking eye fixations in a laboratory simulation of
supermarket shelves. The findings are fully compatible with the general view that
the choice process is constructed to adapt to the immediate purchase environment.
Another study by Chernev (1997) analyzed the effect of common features on
brand choice and the moderating role of attribute importance. It is argued that
when brand attributes differ in importance, with the best value on the most
important attribute, thus further polarizing brands' choice shares. In contrast, when
attributes are similar in their importance, common features are likely to have an
opposite effect, equalizing brands share.

37. MarketSegmentation
In this section, the author will discuss how Avon segments its markets and
what bases for segmentation the company uses.
Market segmentation, according to Applbaum (2004), is the act of dividing
distinct groups of buyers who might require separate products and/or marketing
mixes . According to Mochis (1994), market segmentation refers to subdividing the
market into several groupings, with each group being recognized for its
preferences regarding products/services and methods of delivery (p.41). Market
Segmentation is marketing management techniques which can help firms find
ways of establishing competitive advantage.
Market segmentation amounts to partitioning a market into a number of
distinct sections, using criteria, which reflect different and distinctive purchasing
motives and behavior of customers.
Avon is a global leader in cosmetics and as a company with global presence the
company uses different bases for segmenting its customers and target markets.
Among the bases of segmentation that Avon uses are:
1. Geographic - geographic segments mean location and this can include streets,
towns, cities, regions, countries, continents etc (Proctor, 2000).
2. Demographic - demographics or social statistics includes age, sex, family, life
cycle, job type/socioeconomic and group income level (Proctor, 2000).

38. 3. Psychographic - psychographics attempts to segment according to
psychological profiles of people in terms of their life-styles, attitudes, and
personalities (Proctor, 2000). This approach according to Sternthal and Tybout
(2001a) focuses on lifestyle rather than demographic information as a basis for
describing segments. For this purpose, questions about activities, interests, and
opinions are asked.
In recent years, Avon started focusing on capturing the market for younger
women, College students, and men with disposable income. Avon also looks at
extending market growth to include developing countries such as Poland, Vietnam,
Cambodia, and Czech Republic.
Avon has segmented its market in the following Age groups.
 Youngsters: From age of 16 to 24
 Middle aged women: From age of 25 to 35
 Old women: 35 above.
Cause-Related Marketing
Avon reaches around a billion women through 3 million independent sales
representatives in 136 countries. The company is committed to its mission of
becoming a company that understands and satisfies the product service and self-
fulfillment needs of women globally. In line with this mission, the company has
been supporting the “Crusade Against Breast Cancer” in order to uplift the lives of
women around the world. Through this cause Avon is able to meet business

39. marketing and communications objectives at the same time support a cause of real
concern to their target market.
MARKETING RESEARCH METHODOLOGY ANDRESULT
Research methodology
For this chapter I have realized a marketing research with the theme: attitudes,
opinions and behaviors of Brasov women regarding the purchase and use of
cosmetic products. The objectives of this research include:
1. Identifying the main behaviors of Brasov women regarding the purchase of
cosmetic products
2. Identifying the attitudes of Brasov women regarding the used products
3. Identifying the opinions about used cosmetic products In this research I used the
random sampling method, according to which, all individuals that are part of the
studied population have the same probability to be sampled. Because it is very
difficult to obtain a list with the entire female population I chose to make a
stratified sampling. The researched population for this marketing research is
Brasov female population aged 18 and over.
From the 15 districts of Brasov I randomly picked up 3. At this level I have
created a list with all buildings and households. The research was realized on a

40. sample of 100 persons and it has a maximum error of 9.8%. The questioner
includes 26 questions from which 5 serve for identification.
Research results
Firstly I used a filter question to split up the sample in 2 groups and to focus
on the researched segment. At the question “Do you use cosmetic products?”100%
of the respondents answered with yes.
For the next question “how often do you use cosmetic products?” 77% of
respondents use cosmetic products daily, 12% weekly and the other 4% only few
times per year. We can reach the conclusion that the majority of Brasov women
use cosmetic products daily.

41. At the question “what range of products do you buy more often?” – 57% from the
respondents purchase personal care products, 23% makeup, 17% perfumes and 3%
accessories. It results that the respondents buy mostly personal care products and
cosmetics. Perfumes and accessories can’t be neglected. This result was expected
because personal care products are used daily, cosmetics are indispensable to any
women and the accessories and perfumes have an extended usage.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Daily Weekly Yearly
The Frequency of use of Cosmetic Products
The Frequency of use of
Cosmetic Products

42. COMPETITORS& TARGETING
Every company in the cosmetic industry is actively engaged in being a
market leader by fulfilling the needs and peremptory request of the customer
related to health and beauty products.
The Predominant acquired
range of products
Personal Care
(57%)
Product
Cosmetics(23%)
Perfumery(17%)
Accessories(3%)

43. Companies such as Estee lauder, max factor and Revlon have many
competitors such as Channel, Lancôme, Maybelline, L'Oreal, Lakme but the main
competitors of Avon is Mary Kay across united kingdom as it is similar to Avon
and is dependent upon the independent sales and direct selling method. Hence both
these are the rivals of each other in the same business market (Kumar, Massie and
Dumonceaux, 2006). In Romania, Avon Cosmetics is operating in a market
economy. A basic characteristic of market economy is the competition, reason for
which this is also known as competitive economy.
In market economy, the success orfailure of a company’s actions is not
determined only by strategies, methods and tools that the company owns, or by the
professionalism with which they are handled, but also by the moves of the
competitors. In decision making process regarding market actions, should be given
importance to the activities of the other participants with which the company is in
direct or indirect competition.
For Avon Cosmetics Romania, any cosmetic productexistent on
Romanian market represents a competitive product. Of coursethere are some
criteria that differentiate the competitors. The most important competitors of the
company are those who operate on the same target market and utilize the same
strategy. The process ofidentifying the competitors is very important for the
company. The main competitors of Avon Cosmetics Company are: Oriflame,
Nivea, L’Oreal and Maybelline.
Avon, Company`s most important and primary target market has always
been woman between 35 and 54 but now the company is totally engaged to focus
the teens because of large growing teen market through internet, direct selling, and
catalogues. Promoting and selling Avon product to the youngsters is Avon's new

44. plan of action to expand the business into new product class and paths to
distribution.
Company is finding the young sales representatives with the age lesser and
equal to thirty five, to market their brand to attract the youngsters (All business,
2001).Avon is focusing on the women possessing high passion and love for
beautifying their body. It follows Differentiated strategy as they are focusing on
two marketing mix for two different target markets.

45. Recommendation
The recommendation for Avon focuses on ways of reaching out to the
customers and gathering information from them that can be used in designing
products and services. It is recommended that the company make use of Customer
Relationship Management (CRM) in order to build a strong long-term relationship
with the customers.
Customer Relationship Management (CRM) can be defined as the
development and maintenance of mutually beneficial long-term relationships with
strategically significant customers (Buttle 2000). CRM according to Plakoyiannaki
and Tzokas (2001) is an IT enhanced value process, which identifies, develops,
integrates and focuses the various competencies of the firm to the ‘voice’ of the
customer in order to deliver long-tern superior customer value, at a profit to well
identified existing and potential customers.
Customer relationship management focuses on strengthening the bond
between customers and the firm by maximizing the value of the relationship for the
benefit of both the customer and the firm. As a business philosophy, CRM is based
upon individual customers and customized products and services supported by
open lines of communication and feedback form the participating firms that
mutually benefits both by buying and selling organizations.
The buying and the selling firms enter into a ‘learning relationship’, with
the customer being willing to collaborate with the seller and grow as a loyal
customer. In return, the seller works to maximize the value of the relationship for

46. the customer’s benefit. With the objective of most businesses today being to create
and maintain loyal customers at a profit, CRM provides the platform for seeking
competitive advantage. As a business philosophy, CRM is based upon individual
customers and customized products and services supported by open lines of
communication and feedback form the participating firms that mutually benefits
both by buying and selling organizations.

47. CONCLUSIONSAND PROPOSALS
Company’s position on the market must always be improved, Avon being
currently considered a strong and modern company, concerned to improve itself.
It must be maintained the quality differentiation strategy in order to offer superior
products and to thank all consumers’ categories. The renewal assortment strategy
is beneficial for Avon, which is a modern company and wishes to correspond to
the new requirements of the fashion and technology.
From the prices point of view, Avon is above the medium price of cosmetic
products from Romania, but the level of price is justified by the quality of sold
products.
From the marketing research we noticed that the majority of Brasov women
purchase products from Avon Company. The frequency of use is important, 77%
of the respondents use cosmetic products daily and 12% weekly. Another
important element is the competition. After analyzing data about Avon Company
and its competitors we observed that the first company in consumer preferences is
Avon, followed by Nivea Company.
This is becauseAvon addresses it products to all women. To establish the link
between age category of the respondents and the range of products they buy most

48. often, by using Chi-square test we determined that there is connection between the
range of products bought from Avon and the age of respondents.
It is known that perfumes and accessories specifically are addressed to young
women. As a suggestion for Avon Company I consider that it would be an
advantage if the time between the moment when the order was launched and the
moment when the productwas delivered would be diminished. Also I consider that
there should run more advertising spots ontelevision channels at times with high
ratings.