Jessica Wang, Jana Levin, Jackie D’Aquila, David Sit
CM 447
Coursework 2
26/04/13

I. OVERVIEW

For decades, Avon has been an iconic brand for its unique business model, active service to the community, and success as a global name. However, since 2008, Avon’s profits have been falling significantly due to a failure to adapt to changes in the macroenvironment. For example, the recent growth of technology has influenced the way that consumers are buying beauty products. Direct selling has decreased in popularity due to increases channels of distribution, and more consumers turning to the Internet to make cosmetics purchases. Yet, Avon remains behind other major beauty companies like L’Oreal and Unilever in terms of online presence.
The combination of these factors has reduced the demand for Avon products and decreased the amount of women, who are interested in selling them. In response to their falling sales, Avon has adapted a penetration strategy that involves brand extensions to men’s personal care, teen cosmetics, and natural skincare products. In addition, Avon has extended its distribution to outlets to mall kiosks and larger retail stores. This diversification in product selection and sales has left Avon with a lack of focus that has left employees spreading their efforts too thin and consumers questioning its brand identity.
Lastly, Avon’s success in the 1960s and 1970s was mostly among stay-at-home suburban mums, and the lack of sustained advertising in contemporary media has perpetuated the brand’s association with a more mundane lifestyle and an older demographic. Specifically, these associations are not attractive to today’s consumers, who crave glamour and follow urban trendsetters. In a market that is becoming increasingly digital, Avon has failed to translate its identity into its website and has not used social media to