International Business - Research Paper Example

As per Avon's global strategy it is imperative to sell directly to individual consumers and the product's brand names can be changed in accordance with the cultural environment of different countries but the global brand name will be their primary identification. Avon allows every branch or subsidiary to set its own competitive prices in response to their local market conditions and the inter-country transfer of learning, resources and practices. 1. Your reading assignment for this unit describes different marketing orientations.

Discuss the applicability of each to Avon’s international operations. Production, sales, customer, strategic marketing, and social marketing are the most common marketing orientations. Avon uses a mix of customer, strategic marketing and social marketing orientations in its global marketing strategy. Avon is basically a customer oriented company which allows product modifications as per country-specific or customer-specific requirements. As a part of its social marketing campaign to support women, Avon started its social awareness programs like fighting against domestic violence and breast cancer.

Avon also introduced insect-repellent skin creams in South American countries. The company also took an innovative step in its distribution method in China to appropriately implement its strategic marketing orientation. 2. Why is Avon so much more dependent on its foreign operations than on its home (U.S.) operations? The strategy of going global was based on a primary fact that there will be more chances of profitability if you could access more customers. The basic reason of exporting is to increase the profitability of business either to explore new markets or to get rid of local heavy competition.

Avon had both. The selling model developed by Avon that is in accordance with the nature of their products is not much suitable for the women in United States. As a large number of women are engaged in full time jobs, it will be difficult to access them through direct selling model. 3. Discuss socioeconomic and demographic changes that could affect Avon. Avon has a specific sales model that is line with its business model and the nature of products it is selling. However in order to make the business profitable, it is necessary to understand the socioeconomic and demographic trends of the country.

In United States, the availability of women is a major issue. Avon needs part time sales force to implement its sales model effectively with a low labor cost. The unavailability of women affects the volume of sales because there will be fewer candidates willing to take the part time sales representative job and also there will be fewer women to meet those representatives to buy the products. 4. How might a global recession, such as the one that began in 2008, impact Avon’s operations? Going global is a risky decision as the economic recession can affect the profitability of a global company more than a local company.

Some portion of operating cost of global operations is fixed in nature and can not be avoided like legal formalities of each country. Global recession also affects the purchasing power of customers and they are now more focused on the usability of the products they purchased. In this situation, companies are focusing on modifying their business strategies to deliver products with more functions with an economic price in order to satisfy the