DIRECT MARKETING OF AVON

Executive summary

About the project

Within a short span of the last five-six years, the use of cosmetics by Indian
consumers has increased significantly with more and more women and men taking
greater interest in personal grooming, increasing disposable incomes, changing life
styles, influence of satellite television and greater product choice and availability.
This cosmetics and personal care industry has been growing at an average rate of
20 per cent for the last few years.

Plan of the project

Beauty is skin deep… and sure enough Avon understand it like no one does Today
brand Avon stand strong as one of the 100 most powerful brands and right fully so
,for it’s ‘the’ brand that lights up the face of million girls ,everyday. It’s a brand
that inspire, motivate and infuses confidence, colours, shades, brushes and tones to
beautify, have been the core attribute of the products. The challenge which the
cosmetic industry has to break was the negative connotation of “being fashionable’
 INTRODUCTION

Direct marketing is an advertising and marketing strategy distinguished by at least

one, and sometime both, of two characteristics. First, direct marketing targets
likely consumers with ads relevant to their interests based on demographic and
individualized consumer data. Second, direct marketing prompts the consumer to a
specific action (to send in a form or call a telephone number) rather than simply
seeking to increase brand awareness. This "call to action" distinguishes direct
marketing from general advertising. Forms of direct marketing include: catalog and
mail order, product advertising direct mail, political direct mail, direct response
cards, coupons, infomercials, telemarketing, and e-mail marketing.

The Hartman Center and the Rubenstein Library hold many materials related to the
development, implementation, and evaluation of direct marketing. The following is
an overview of these collections, which include books and serial publications,
catalog and infomercial collections, and the archival papers of advertising
agencies, executives, and some advertisers. They include many examples of direct
mailings, catalogs, and commercials, as well as evidence of how advertisers
thought about, implemented, and evaluated direct marketing strategies.
When direct-marketing is the primary subject of a collection this overview
provides an abstract of the collection and a link to the collection guide. For
collections of which direct marketing materials are only a small part, this overview
provides a more specific description of the relevant materials and their location, as
well as a link to the collection guide. In some cases, a collection contains only one
or two relevant documents. They have been included in this overview because,
together, these documents provide the researcher with several writings, speeches,
and essays on direct marketing, usually by individual advertising agency
executives.
COMPANY 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 its modus operandi; sales
also come from catalogs and a website.

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?

FUTURE OF AVON 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.
HISTORY OF AVON

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.
 OBJECTIVES FOR DIRECT MARKETING OF AVON

To study the direct marketing strategies of avon

(a) competitive strategy

Since its core element is its focus on women worldwide so who else can
understand the needs of women better than another women. Hence in order to
retain customers and garner a good customer relationship they hire women
representatives widely known as AVON LADIES. It gave them a competitive
advantage over their competitors.

(1) Cross selling or bundling strategy

Bundle selling ,also known as up selling and cross-selling is a practice of

marketing, promoting and selling an additional related or unrelated product with
the main product. Thus it ensures economies of scope by reducing average cost of
marketing of two or more brands of the same company. Avon representative make
it a virtue to promote and market secondary products in addition to the product
being demanded.

(2) Advertising in local business

• It is one of the ways Avon agents manage to reach a larger customer base. They
do this by offering to deliver products that customers purchase online to local
businesses such as book stores, coffee shops and restaurants. This effectively
results in saving the shipping costs which is borne by the customers. To make this
arrangement a lucrative proposition for the local businesses who store and hand out
Avon products, the agents offer them a part of their commission

(a) Internet marketing strategy

Another popular and cost effective sales strategy adopted by many Avon dealers is
writing informative articles in websites such as Associated Content and
Ezinearticles.com. These articles are linked to their Avon business website. This is
an excellent way to drive traffic to websites and increase sales.
(1)To study the impact of direct marketing on avon

On the selling side, recruiting sales people had become problematic, much as it had
for other direct sellers like Mary Kay Cosmetics and Premark International’s
Tupperware division. To attract sales representatives and boost productivity, Avon
improved incentive-compensation plans and offered free training programmes for
recruits. As a result, Avon’s direct-sales business – which accounts for 70 per cent
of sales and 85 per cent of operating profits – experienced a dramatic turnaround.
Within a year sales rose 17 per cent, to $2.9 billion, and profits jumped as much as
25 per cent.
Today more than 450,000 sales representatives work for Avon and fill out some
50,000 orders daily. Sales exceed $3.5 billion a year. Nonetheless, Avon estimates
that at least ten million women in the US who are interested in buying from Avon
are unable because no sales representative is calling. To win back some of the
customers and attract new ones, the company has begun mailing catalogues
directly to potential customers nationwide. The move represents growing concern
at Avon that its core market has matured. The growing number of women joining
work force means that fewer of them have time to meet with Avon representatives.
Although Avon remains the nation’s largest direct seller of beauty products,
supermarkets and discount stores are stealing market share. Avon hopes that mail-
order catalogues will help to reach “stranded” customers.
The plan is to send catalogues to people who have moved or who no longer are
active buyers. They can then order directly through the company or through a
salesperson. Initial expectations are modest. Avon hopes catalogue sales will reach
$25 million the first year. In the long run, Avon hopes to penetrate major cities and
suburbs, the places where much of the female work force is absent at prime selling
times. Avon is also increasing the use of toll free numbers in conjunction with this
strategy.
 2. To study the benefits of direct marketing of avon

FOR SELLERS:

 Be your own boss

 Choose your own flexible work schedule, benefits people that have other
commitments, such as family or another job

 Fosters, in particular women entrepreneurship - ability to learn transferable

business skills

 Low cost and low risk entry point

 Vocational training, Training and support offered by direct selling companies

 Everyone can do it: No formal qualifications required

 Large range of top quality products

 Social contact and personal recognition

 An additional income related directly to the efforts invested

FOR CONSUMERS:

 Opportunity to try and test the products in a friendly environment

 High level standards of consumer protection

 Great depth of product information and explanation based on the direct seller

 Innovative or distinctive products not readily available in traditional retail stores

 Convenient and service oriented (e.g. home delivery)