AVON Calls on Foreign Markets Case Study

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The company's founders and senior managers however feared this would make the company less agile and able to respond to market requirements (Grammenou, 2009).

Demographic Analysis

There have been many socioeconomic and demographic changes that have affected Avon's business model in the last two decades. The greatest socioeconomic force affecting them today is the need for many women to work full-time jobs to contribute to their household's income. This has drastically changed the company's distribution model as there are fewer women to work as part of their sales force. The shift in socioeconomic status is also one that has made competition with stores even more focused and aggressive, as retailers have the advantage of being more of a product aggregator than product developer. Their distribution model is shifting significantly as a result.

Increasing the urgency of the decision was the fact that demographic markets were changing rapidly, as were the preferences and wants of women for beauty care products. This pace of demographic change was occurring at varying levels within the nations Avon operates in, yet all of them combined sent a clear message that Gen X and baby Boomer product needs could far outpace any other category for the foreseeable future (Tarquinio, 2004). In addition, the fact that more women than ever before were going back to work was quickly changing the company's distribution model; many women simply did not have the time to be an Avon Lady anymore (Grammenou, 2009).

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What made all of the demographic and socio-economic changes so challenging to navigate was the fact that preferences for cosmetics were changing too. Younger, more educated Gen Y women wanted environmentally responsible or "green" cosmetics, as sustainability is very important to them as a value (Prior, 2010). The development requirements in this market of Gen Y consumers however is significantly different than the major cash source of the company today, which according to the case study are women from the Gen X and Baby Boomer generations (Grammenou, 2009). What Avon has had to do is concentrate on how to create effective marketing programs for each of these divergent markets while at the same time attempting to standardize on product components to streamline their supply chains (Tozzi, 2010). Of all factors that the case alludes to, this dynamics is what makes their supply chain operations the most difficult to manage over time. The company has created a very strong word-of-mouth campaign and has an exceptional level of trust in the industry for its products. Attempting to chase.....

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