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Avon Case Study

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Avon Case Study
• For 113 years, Avon has used only direct selling.
• In the late 1990s Avon was operating in over 135 countries with a sales force of more than 2.3 million independent representatives.
• Avon Ladies – their representatives – handled 650 million customer orders and generate more than 2 billion US dollars in commissions per year.
• The personalized, friendly customer service offered by Avon Ladies is considered a key competitive strength.
• Company moved into China in 1990 and with the common cultural background and relatively new concept of direct selling in China, it appeared to be a promising opportunity.
• Key issue/problem, which Avon encountered, was on April 21, 1998; the Chinese government announced an immediate ban on all direct selling.
• In response to the ban in China, a course of action Avon could have taken would be to adjust their market strategy in order to continue their operations in China.
• Once the ban was set into place by the Chinese government, Avon could have taken the time given by the government to obtain a retailers license. Opening a retail store, the Avon ladies could continue to apply the companies selling approach policy.
• Although there could have been am alternative course of action for Avon, choosing to cease sales operations in China was the best course of action.
• By ceasing sales operations, Avon was able to maintain their company policy, image, and their competitive strength.
Questions:
1. Avon is seen as a company that “thinks globally and acts locally”. They balance the cost-saving potential of standardization with responsiveness to individual market needs in both profits and market shares. Developing a ‘global product’ line, allows the company to sell in multiple markets by limiting variations in packaging and marketing to meet differing national requirements. With this said, Avon should not

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