Avon.

Com
Presenters, Team 3
Marketing 445-01
May 31, 2006
Ashley Caldwell
Harold Goldsberry
Courtney Hamm
Brandon Johnson
Table o Contents
Executive Summary 3
Introduction 4
History o Avon!com 4
"iscussion #
Conclusion $
S%&' Analysis (
%or)s Cited *+
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!"e#$tive %$mmary
%tatement o t&e Problem' Avon!com must be inte,rated into the com-any in a way
which not only su--orts the current re-resentatives. but also builds u-on the stron,
community that exists in the customer base!
(a#kgro$n)' Avon has already made a moderately unsuccessul attem-t at an online
-resence in *//$! 'he current website must be created in such a way that it allows the
best -ossible -urchasin, and shi--in, o-tions. alon, with the most -owerul community
builders!
*is#$ssion' Inte,ratin, the re-resentatives into Avon!com by havin, them -lace their
orders online would allow the re-resentatives more time to -romote and ,ather uture
customers or themselves and the website! Also. the -ercenta,es show that the
ma0ority o the tar,et mar)et eels more comortable buyin, throu,h a re-resentative!
In addition to this inte,ration. the com-any should sell -roducts that are only
available online in addition to -roducts that are only available throu,h re-resentatives!
'his would hel- balance the sales between re-resentatives and the website! Also.
shi--in, cost should be consolidated to -rovide the lowest inal -rice -ossible or the
customer!
+e#ommen)ations'
Incentives or Avon 1e-resentatives -romotin, Avon!com
%ebsite advertisin, aimed at women in the tar,et mar)et
%ebsite exclusive -roducts to increase website traic
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,ntro)$#tion
'he issues -resented in the case center around the recreation o Avon!com!
2ost im-ortant to the case are the inte,ration o Avon re-resentatives and the ,eneral
strate,y o Avon!com! &ther concerns include commission allocation. -roducts to be
sold on the site. mar)etin, strate,y. and shi--in,! In addition. the overall o-inion o
Avon customers must be ta)en into consideration. in -articular customer buyin,
-atterns!
-istory o Avon.#om
Avon was an early -ioneer o online sellin,. bein, one o the irst direct3sellin,
com-anies online in *//$! 'he initial website was created with a bud,et o less than
44++.+++. allowin, it to ocus -urely on sellin, Avon5s -roducts! It did not oer any
additional inormation on its -roducts or community buildin, services! 'he website was
also viewed as a way o testin, the -otential o sellin, on the Internet rather than a true
sellin, website! In this test run. Avon only oered its beauty -roducts online. and
ne,lectin, 4+6 o its -roduct line! 2inimal advertisin, o the website was used. and
these actors caused the ori,inal website to have almost no ex-osure and small sales!
Avon inally reali7ed in late *//( that Avon!com oered a hu,e -otential to reach
more customers and increase sales! Avon ,ave 8en Edwards the res-onsibility o
revam-in, the website! 'he -roblem acin, Edwards was the main a--roach o
Avon!com! Edwards could either create a new commerce only website or a website that
ostered community buildin, and sharin, o inormation! Each had its own advanta,es
and disadvanta,es!
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'he irst choice was to create a new website. much li)e the irst one! 'his would
be ocused more towards sellin, Avon5s -roducts and less at sharin, o inormation!
'his a--roach would it in well with Avon5s traditional direct sellin, method! It also
would allow Avon!com to be the only method o -urchasin, Avon -roducts directly rather
than rom a retailer! 'he downside to this strate,y was that Avon5s initial commerce3
only website was unsuccessul!
'he second a--roach was to create a website that allowed users to create a
community where women and Avon would be able to interact and share inormation!
Considerin, the recent ,rowth in internet usa,e. this seemed to be the most a--ealin,
o-tion! Ste-hen 9in,. the vice3-resident o e3commerce said. :1emember. we5ve ,ot
hal a million ;!S! re-resentatives at any one time! 'hree in our have access to a
com-uter. and two in three have access to the %eb! 'hat could be <uite a community!=
However. this a--roach did not ocus on direct sellin,. the )ey to Avon5s success!
Beore ma)in, a decision. Edwards elt it necessary to enlist an e3commerce
consultin, irm or data collection and to hel- in the decision -rocess! Edwards also
utili7ed ex-erts rom irms such as A&8. >ahoo?. and 2icrosot that had successully
used the internet in non3com-etin, mar)ets! 'he inal ste- involved the study o ocus
,rou-s. allowin, Avon to obtain in3de-th inormation about what current and -otential
customers elt should be included on the site! 'he entire data collection -rocess too)
around nine months to com-lete!
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*is#$ssion
&ne <uestion Edwards aced was the role that Avon re-resentatives should -lay
in Avon!com! Avon re-resentatives should be able to order materials online or
convenience! 'he incor-oration o this unction into the web site will insure that the
re-resentatives beneit rom this new set u-! In addition a system should be
im-lemented by which re-resentatives can still earn commission i ine o their
customers -urchases an Avon -roduct throu,h the website! I it is not -ossible to credit
the sale directly to a re-resentative. hal commission should be -aid to the local
re-resentative!
'o lessen re-resentatives5 ears about the website. the com-any should ma)e
some -roducts only available to re-resentatives that encoura,e lar,e numbers o
consumers to enter the website! @ree shi--in, should also be available or lar,e orders
rom re-resentatives. encoura,in, ,reater order <uantities and -ushin, re-resentatives
to sell more -roducts!
'he next <uestion that Edwards5 team had to ace was how to increase traic on
Avon!com! I re-resentatives were still able to receive commission on website
-urchases. they would have a ,reater incentive to -romote the site to their customers
as an alternative method o -urchasin, Avon -roducts! 'he site should also be
inte,rated with online communities havin, a lar,e number o emale visitors such as
iAilla,e! In addition to this a--roach. the site could use behavioral tar,etin,B a ty-e o
internet advertisin, that trac)s consumer clic) -atterns and then uses that inormation to
advertise only to consumers that would be interested in the -roducts CHaw)ins. D4DE!
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Froduct -ac)a,in, should also include inormation about and an invitation to 0oin
Avon!com. increasin, awareness amon, current customers!
'he next issue related to which items rom the -ro0ect line should be available to
online sho--ers! 'he com-any should ma)e nearly all o its -roducts available online!
Statistics show that the avera,e customer -reers to order directly rom a
re-resentative. and oerin, all -roducts online would sim-ly ,ive consumers a method
o researchin, available -roducts and also -rovidin, inormation on several orderin,
methods! 'he com-any should also eature web exclusive -roducts. in -articular new or
test -roducts! 'he convenience and exclusivity o this model would not only increase
word3o3mouth -romotion o the website. but also sales by a--ealin, to consumers5
sense o individualism!
@inally. Edwards and his team had to decide the best method or shi--in,
-roducts rom Avon!com! Froducts ordered online should be shi--ed in whatever
method the consumer -reers! By ,ivin, consumers the choice o direct shi--in, or
receivin, orders rom an area Avon re-resentative. the com-any will have the
o--ortunity to determine which shi--in, method -rovides the best value or the
com-any and the consumer!
Con#l$sion
Avon re-resentatives should be directly included in Avon!com! 'o ensure that
re-resentatives will -romote the website. the com-any should determine a method o
allottin, commission to the -ro-er re-resentative! Certain -roducts should also be
available exclusively throu,h re-resentatives to ensure that -urchases are also bein,
made outside o Avon!com! 1e-resentatives. online communities. and behavioral
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tar,etin, should all be used to hel- drive traic to the site. and most o the com-any5s
-roducts should be available online! In addition. the use o web exclusive -roducts will
not only increase traic. but will also -rove to be an eective test mar)et or new
-roducts! Customers should be able to choose whether to have their -roducts shi--ed
to and delivered by their local re-resentative or a more direct shi--in, o-tion! 'his will
allow Avon to observe which method most customers -reer and hel- it to narrow its
ocus!
%./T Analysis
Strengths
%orld5s lar,est direct seller o beauty -roducts!
D++.+++ Avon re-resentatives in the ;S alone!
Have G# ma,a7ine cam-ai,ns -er year!
8ow -roduct cost that is ,eared toward lower to middle class -eo-le!
Weaknesses
Avon uses very little money on advertisin,!
%ith nearly *++6 turnover in re-resentatives. there is a lar,e number o
:stranded customers!=
'he cost o shi--in, can hurt re-resentatives who cannot ,et lar,e <uantity
orders to,ether durin, the G3wee) -eriod!
Opportunities
'here is a ,rowin, mar)et that hasn5t yet been reached!
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Americans are becomin, increasin,ly cost conscious. and Avon can urther
-romote that ty-ical -rices are lower than avera,e!
%ith online communities ,rowin,. es-ecially or women. Avon!com can reach
more -eo-le in a much aster and -rivate manner than they currently can!
8ar,e -ersonal care -roducts mar)et that Avon can continuously introduce new
-roducts to!
Threats
Avon!com could ma)e -eo-le more hesitant to become sales re-resentatives!
"ru,stores oer many ma)eu- -roducts online already!
&ther com-anies such as 1evlon. 8ancHme. and other ma)eu- com-etitors!
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.orks Cite)
Haw)ins. "el I!. 2othersbau,h. "avid 8!. and Best. 1o,er J! Consumer Behavior:
Building Marketing Strategy! BostonI 2cGraw3Hill Irwin. G++$!
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