A project by: HD Consulting Stephanie Hammond and Denise DiLissio

1. A project by: HD Consulting Stephanie Hammond and Denise DiLissio

2. This is the company that knows the value ofa perfect lip, but still opens its mouth and Speaks Out against Domestic Violence. BEAUTY

6. Take Notes! http://youtu.be/WYRd4jgvu6I

7. Video Quiz What is the name of the foundation featured? Avon Foundation for Women What are the two causes spoken about? Breast cancer and violence against women *now includes global emergency relief* What celebrities spoke about Avon? Christy Turlington, Patrick Dempsey, Reese Witherspoon, Melissa Ethridge How much had the foundation raised by the airing of this video? 800 million dollars What was the foundation’s goal by 2012? 1 billion dollars *they raised 910 million*

8. Executive Summary Avon is a global manufacturer and marketer of beauty and related products. Avon was founded in 1886 by David McConnell. Avon is headquartered in New York, NY. Avon employs approximately 42,000 employees. Avon has 6 million+ active independent sales representatives.

9. Executive Summary Avon's mission is focused on six core aspirations the company continually strives to achieve: • Leader in global beauty • Women's choice for buying • Premier direct-selling company • Most admired company • Best place to work • To have the largest foundation dedicated to women's causes: Be a • committed global champion for the health and well-being of women • through philanthropic efforts, with a focus on breast cancer, domestic • violence and women's empowerment.

10. 1932 Company moves from a monthly campaign to a three-week selling cycle and reduces prices on specific products for each campaign. 1902 1920 Timeline California Perfume Company has 10,000 representatives Sales top $1 million for the first time 1886 1948 1895 1928 1886 Avon is founded as the California Perfume Company by David H. McConnell CPC uses AVON name on everyday products CPC opens manufacturing headquarters in Suffern, New York Sales surpass $21 million 1953 Mrs. P.F.E. Albee a 50 year old housewife becomes the first sales representative 1939 California Perfume Company is renamed AVON Avon’s first television advertising is launched 1914 Company expands internationally

11. 2006 Avon wins first direct selling license in China 1972 1978 1996 Sales reach $1 billion Timeline The number of Representatives reaches one million and sales top $2 billion Avon is the world’s first beauty company to launch an e-commerce site 2003 1957 Avon launches mark., its brand for young women The number of Avon Representatives grows to 100,000, with the company breaking the $100-million sales mark 1954 The “Ding Dong, Avon Calling” campaign launches and runs through 1967 1955 Avon starts the Avon Foundation in the U.S. 1999 2001 Avon names its first female CEO: Andrea Jung Avon launches its beComing line in J.C. Penney Stores; the venture ends in 2003 2005 Avon announces first restructuring

12. Timeline 2008 2011 Avon says a whistleblower alleges violations in China of the Foreign Corrupt Practices Act Company says it is under investigation by the SEC for FCPA violations; announces the company is beginning search to replace Jung as CEO 2012 Initiates cost savings plan to stabilize the company 2012 Avon names new CEO: Sheri McCoy 2012 2009 2008 Avon receives an unsolicited takeover bid from fragrance company Coty Avon has more than 6 million Representatives; Management says it will restructure again Avon has more than $10 billion in sales 2011 AVON CELEBRATES 125 YEARS OF EMPOWERING WOMEN

13. Marketing Analysis Through the eyes of the consumer 5 P’s of Marketing Brand Strategies Social Media Marketing Perceptual Map Brand Prism

14. Survey/Focus Group - Conducted with 10 women ages 29-72 What do you think Avon’s biggest strength is? A lot of products to offer Well known brand Been around long time Buying online Products/price Quality and price of products Customers are very loyal What do you think Avon’s greatest downfall is? Not enough reps in area Not marketing towards the younger crowd Old company – people think of Avon for older people Too much novelty products Probably most think its their mother’s products Lack of advertising or not as much Catalog sales only

15. 5 P’s of Marketing

16. Product • Makeup • Skincare • Bath & Body • Fragrance • Hair Care • Jewelry • Fashion • Home • Children • Men

17. Price • From $0.99 to $60.00 for products • Average cost of catalogs = $20/month for representatives • Samples and door bags are an extra cost for representatives • Avon charges representatives $0.37 per customer that you have Promotion • Individual direct selling • Catalog distribution • Samples

18. Place • Direct selling from Avon representatives • Online option from Avon • Online directly from representative* • Brick and mortar stores Potential Representatives • Avon’s greatest asset • Word of mouth • Immediate sign up on website

19. Brand Strategy

20. 3 Pillars of Avon • Women Empowerment, Sustainability, Philanthropy • Global Brand • Operates in over 100 countries with over 6 million active representatives • Latin America is top selling region followed by Europe, Middle East and Africa • North America comes in third

21. Red Ocean and Blue Ocean Strategy • Originally 100% Blue Ocean as they created new market space and were a game changer, but now has competition • If more than one representative are within close proximity of each other, it is red ocean strategy between them • Central Route to Persuasion • Initial purchases require more thought as you have to consciously find a representative (in person) to make a purchase • Multi-segment Strategy • Mass marketing – no differentiation in how products are offered • Offers many different types of products in a wide price range • Offers products to women, children and men • Relationship Marketing • Encourages lifelong relationships between representatives and their customers, and therefore, with Avon

22. Social Media Analysis

23. 1.1 million likes on main page Multiple pages for different countries Vibrant & engaging equaling many picture shares Showcases wide range of products

24. Over 51 thousand followers Posts daily Moderate amount of retweets Vibrant & engaging

25. Over 35,000 employees linked Over 76 thousand followers Only five recommendations A plethora of information

26. Over 931 thousand video views Over seven thousand followers Beauty tips and behind the scenes Avon seller videos as well

27. Conservative Luxury Affordable Sexy

28. Brand Prism

29. What *Color cosmetics, skincare, fragrance, fashion and home products *Direct Selling *Sherry McCoy *Empowering Women *Sustainability *Philanthropy *“The Avon Lady” For Whom Women 16 & up Low Middle and Middle Class Incomes Recession Conscious women Relationship/Consultation Seeker Entrepreneurial Go-Getters Stay-at-home Moms Feminists Activists Against Whom Animal Testers Mary Kay Masculine Men Domestic Violence Offenders Mercenaries When Everyday Use Seasonal Purchases Planned Purchases

30. Financials

31. Financials

32. Financials Billions

33. Financials Millions

34. Brand Difficulties

35. Avon has lost it’s magic throughout the years because of technology. They were the first beauty company to launch an e-commerce site (1996). Online selling takes away from its heart. “Ding dong, Avon calling.” Inconsistent social media strategies. Signs of brand confusion.

36. Avon’s global ambassador and Honorary Chair for the Foundation for Women, Reese Witherspoon, has had some recent bad press. She is the face of the Avon breast cancer walks in North America. Avon needs a celebrity that embodies natural beauty that is enhanced by Avon products, and is wholesome in the eyes of the consumer.

37. Avon’s reputation has been tarnished and leadership is unproven Avon is being investigated to determine if they paid bribes in China and other countries Avon predicts they will incur a loss (pay substantial fines)

38. Avon shareholders sued Avon for not acting in their best interest Coty offered to acquire Avon for $10.7 billion, or $24.75 a share At the time of the offer, Avon shares were $20.96 a share, giving the company a market value of about $9 billion

39. Significant decline in sales force of representatives Number of active representatives declined 8% to about 420,000 Too much pressure on current representatives to find new ones. Nickel and diming representatives. Survey results to “Why do you no longer purchase from Avon?” Friend stopped dealing No reps in area Out of sight out of mind Don’t have seller close by Not easily accessible

40. Recommendations

41. Enhance Reputation, Ethics Programs and Training Externally - Rebuild image through advertising that builds on the image of AVON that is well-known for empowering women Internally - Avon enhance their ethics and compliance program and expand their compliance-related training to ensure employees understand the program and the importance of compliance take out Convince Shareholders the Decision Not to Sell was Considered Build trust with their own shareholders through their performance that helps to grow the business

42. Leadership needs to prove itself Stop trying to be what they are not and focus on their roots. They were successful when they sold door to door. These face to face relationships touched peoples hearts.

43. Survey results to “How can Avon boost its visibility or gain you as a customer?” More samples, advertise more, have home parties New campaign to bring younger generations in Sell in stores Somehow market to younger Online directly More marketing online Make it easier to purchase, walk out with same day purchase Target younger generation, available in retail stores

44. Increase overall Brand Presence This would be a strategic re-launch of the why Avon began Market to those that want a personal experience with shopping that technology has strayed away from Launch a commercial campaign to gain more representatives This increases brand awareness for the Avon name Use You Tube, Vimeo and other video sites to post tips for reps Publicize the good that the Avon Foundation for Women does Have a more consistent and persistent social media strategy Have representatives be the “eyes and ears” of the company Avoid brand image confusion, by continuing to emphasize what Avon is known for http://youtu.be/45IwGho9xc4

45. Revamp rules for the representatives Require a number/name of representative when ordering online Stop nickel and diming Incentivize representatives who continually increase sales or have a higher than average rate by giving them catalogs and samples Do not charge the customer fee when that customer consistently orders from that representative over the span of two years Encourage blue ocean marketing strategy by seeking out areas (zip codes) where representatives do not exist Design a program for zip codes that currently have multiple representatives so that the competitiveness does not overshadow the Avon name Invite, Inspire, Inform

46. Celebrity pair with Taylor Swift. Taylor Swift is a hub for followers. Gain more North American exposure. Gain more younger buyers. Partner with current Avon spokeswoman, Salma Hayek.

47. Globally, 4 Avon lipsticks and 2 Avon mascaras are sold every second. Avon has 90% brand recognition in most major markets around the world Avon is the largest corporate supporterfocused solely on women’s issues across the globe. Factoids Avon is one of only a handful of companies to have been on the Fortune 500 list every year since the list’s inception 200+ scientists and technicians work on every breakthrough

48. Questions/Comments

49. Research Citations • http://usatoday30.usatoday.com/money/business/story/2012/09/14/sec-ends-one-avon-investigation-bribery-probe-continues/57781852/1 • http://www.avoncompany.com/ • http://investor.avoncompany.com/phoenix.zhtml?c=90402&p=irol-reportsannual • http://investor.avoncompany.com/phoenix.zhtml?c=90402&p=irol-reportsAnnualArchive • http://www.bloomberg.com/news/2012-05-10/coty-raises-offer-to-acquire-avon-products-to-24-75-a-share.html • http://books.google.com/books?id=bZUPceXxVP4C&pg=PT22&dq=Gertrude+Recordon+facial+treatment&hl=en&sa=X&ei=jjR5UaOiNMeY0QGK8IHAAQ&ved=0CDwQ6AEwAA# • http://www.forbes.com/sites/jennagoudreau/2013/02/27/new-avon-ceo-vows-to-restore-126-year-old-beauty-company-to-former-glory/ • http://www.happi.com/issues/2013-03/view_breaking-news/a-challenging-year-for-avon/ • http://www.theglobeandmail.com/globe-investor/shares-soar-as-struggling-avon-reverses-sales-decline/article8501182/ • http://www.wharton.universia.net/index.cfm?fa=viewfeature&id=2230&language=english • http://seekingalpha.com/article/1174971-avon-products-management-discusses-q4-2012-results-earnings-call-transcript?page=3 • http://usatoday30.usatoday.com/money/business/story/2012/09/14/sec-ends-one-avon-investigation-bribery-probe-continues/57781852/1 • http://www.pbs.org/wnet/moneyshow/cover/090701.html • http://www.myquitamlawsuit.com/index.aspx?id=news_avonfcpaviolations • http://www.fcpa-worldcompliance.com/pdf/avon-article.pdf • http://dealbook.nytimes.com/2012/04/02/behind-cotys-bid-for-avon-a-complicated-story/ • http://www.interbrand.com/en/BestRetailBrands/2013/Best-Retail-Brands.aspx • http://www.avonfoundation.org/foundation/financials/ • http://www.prtm.com/uploadedfiles/books/avon_gets_its_supply_chain_makeover.pdf • http://wiki.answers.com/Q/Why_not_lay_off_Avon_lady_and_buy_the_products_by_internet • http://voices.yahoo.com/surprising-things-consider-becoming-215669.html • http://www.greatbeautybuys.com/about/12-facts-about-avon/ • http://www.reuters.com/article/2012/03/16/us-avon-idUSBRE82F0VN20120316 • http://www.thebeautycompany.co/downloads/Beyer_BeautyNumbers.pdf • http://www.sephora.com • http://www.aloette.com • http://www.marykay.com • http://www.loreal.com • http://www.clinique.com • http://www.maccosmetics.com • http://arbonne.com

50. Image and Video Citations • http://ladyloveavoncosmetics.wordpress.com/ • http://ladyloveavoncosmetics.wordpress.com/ • http://www.guardian.co.uk/business/2012/may/11/avon-ding-dong-battle-coty • http://www.ca.avon.com/PRSuite/supercurlacious_mascara.page • http://www.luvavon.co.uk/FAQ.html • http://www.bloomberg.com/news/2012-05-10/coty-raises-offer-to-acquire-avon-products-to-24-75-a-share.html • http://www.theadmag.co/avon/avon-skin-care • http://sweetiesfreebies.com/free-avon-anew-1-piece-skin-care-kit-first-15000 • http://www.bargainmoose.ca/tag/avon/page/2/ • https://www.facebook.com/AvonbyCindyTorres?group_id=0 • http://www.theperfumegirl.com/perfumes/fragrances/avon/fergie-outspoken-intense/ • http://eseagren.avonrepresentative.com/blog/index.html?blog_postid=1372543 • http://madamedeals.com/wp-content/uploads/2012/06/Avon.jpg • http://bigwebpages.com/members/wordsmith/becoming.jpg • http://business-ethics.com/wp-content/uploads/2010/03/Bribe_IS-150x150.jpg • http://www.bing.com/images/search?q=avon+wins+direct+selling+license+in+China&qs=n&form=QBIR&pq=avon+wins+direct+selling+license+in+china&sc=0-32&sp=-1&sk=#view=detail&id=B8D38690D9C362B4D0E344C2D244F6F07249CD6C&selectedIndex=5 • http://celebbabylaundry.com/wp-content/uploads/2013/04/gwyneth-paltrow-most-beautiful-women.jpg • http://www.avonfoundation.org/ • http://therobinreport.com/tags/beauty/ • http://avonsgdealer.blogspot.com/ • http://www.pinktruth.com/2011/10/i-didn%E2%80%99t-do-it-the-%E2%80%9Cright-way%E2%80%9D-in-mary-kay/ • http://www.rspo.org/en/member/707 • http://wildmorrealty.com/avon-distribution-center-up-for-grabs/ • http://blog.pointroll.com/trend_watch/trend-watch-twitter-turns-seven-facebooks-lookalike-audiences-youtube-has-one-billion-monthly-u/ • http://www.prconversations.com/index.php/2011/08/using-twitter-for-pr-events/ • http://blog.neosusa.com/2011/10/72-6-of-internet-users-will-shop-online-this-year-how-do-you-prefer-to-shop/christmas-shopping-online-l/ • http://9to5google.com/category/youtube/ • http://cindysavonboutique.com/buy-Avon.html • http://janeymay79.hubpages.com/hub/Hi-I-am-the-Avon-Mark-lady-ask-me-for-a-brochure • http://www.stylebistro.com/lookbook/Taylor+Swift/qJh_sqdmUme/Beauty • http://www.fanpop.com/clubs/selena-gomez/images/32789074/title/adidas-photo