Case 4: The Newest Avon Lady Barbie

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Case 4 The Newest Avon Lady Barbie!
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Agenda

• Overview of Case
• Primary Issue
• Company (Micro Environment) ? Strengths and
  Weaknesses
• Changing Marketing Strategy of Avon
• Other Micro/Macro Environment ? Opportunities and
  Threats
• Recommendations
• Domestic Strategy Recommendations
• International Strategy Recommendations
• Takeaways
• Next Class

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Overview

• This case looks
• Problems that Avon has faced over 30 years in
  both its micro and macro environments
• Companys efforts to adjust their Marketing
  Strategy to cope with their changing environment
• What is the primary issue of this case?
• How best to formulate Avons Marketing Strategy
  to meet needs of changing consumers and employees

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• Form Groups
• Discuss Avons Strengths and Weaknesses
• Prepare to Brainstorm
• (10 - 15 minutes)

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Strengths Weaknesses

• Company History
• Company Reputation
• Brand Recognition
• Market Research
• Paying attention to market
• Proactive or Reactive?
• Sales Force
• International Strength
• History of being a Strength Domestically, but
  now?

• Marketing Strategy is unfocused
• Products
• Promotions
• Sales Force
• Turnover
• Inability to serve customers
• Alienation with Changes
• Image
• Your grandmothers cosmetic company

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Changing Marketing Strategy

• Change 1
• Refocus product lines to core businesses
• Price Cuts
• Leadership bonuses for salespeople based on
  sales of people they recruit
• Change 2
• Avon Select
• Catalogue with toll-free number, designed for
  median age 38, hhld income gt 45,000, extensive
  advertising, less commissions and incentives,
  and executive layoffs

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Changing Marketing Strategy

• Change 3
• In Canada, introduced magazine Confidante, and
  new interactive kiosks
• Change 4
• Switched to distribution through retail stores,
  original strength was to avoid retail stores
• Cut product line by 30
• Created global brands and standardized

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Changing Marketing Strategy

• Change 5
• Partnership with Mattel to sell Barbie
• Change 6
• Lets Talk
• Website
• New product categories (haircare, vitamins)

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Unfocussed Marketing Strategy

• Dropping and adding products
• Traditional strength in their sales force now
  they are alienated
• Distribution channel conflicts

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• Form Groups
• Discuss Opportunities and Threats in Avons Micro
  and Macro Environment
• Prepare to Brainstorm
• (10 15 minutes)

• Note that Micro Environment Suppliers,
  Intermediaries,
• Customer Markets, Competitors, Publics
• Macro Environment Demographic, Economic,
  Natural,
• Technological, Political, and Cultural trends

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Opportunities Threats

• International Markets
• Employees available internationally, best/better
  fit for company?
• Shift to skin care products or health-care
  products?
• Other Domestic Distribution Channels
• More Distribution Partnerships with companies
  like Mattel

• Demographics
• Customers and salespeople moving
• Competition
• Customer
• Economic
• Working women not at home
• Fewer p-t sales reps available
• Income Distribution Boomers
• Political (China)
• Cultural
• Technology
• Intermediaries

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Domestic Marketing Strategy

• Recommendations?
• Consistency in Marketing Strategy
• Better Positioning
• Distinctive Product Line
• Better Sales Force Incentives
• Better Coordination of Distribution Channels to
  Minimize Conflict

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Intl Marketing Strategy

• Recommendations?
• Stick with selling to Retailers in China ? less
  risky
• Expect to sell smaller volumes to many customers
  due to Economics of this country
• Different Products to Appeal to this Market?
• Develop more Partnerships with companies like
  Mattel

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Takeaways

• Find a strategy and stick with it
• Important to position a company (re a target
  market) and have a focused strategy that flows
  from positioning
• Always keep in mind the broader environment when
  formulating Marketing Strategy (anticipate
  changes)
• Capitalize on opportunities in developing markets
• May be a better fit with a companys strengths
• Keep in mind Sales force Availability
• Economic, Political, and Cultural factors

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Next Class

• Read Chapter 5 Marketing Research and Managing
  the Information Process
• Complete Question 3, all parts on pg 200