Avon Products, Inc: The Personal Care Industry - Essay Example

Avon marketed its products in 112 countries through 1.6 million sales representatives through “door-to-door” selling and achieved enormous sales figures. Manufacturing, product management and sales were coordinated efficiently throughout its global market (www.dsef.org). Major products to be sold were’ perfumes, skincare products, hand, body and sun care products. New and innovative products were added from time to time to offer more variety to the consumers.

As with all businesses, the company faced stiff competition from other players in the field and had periods of the slump in growth and profits, along with take-over attempts which the company was able to tide over under different managers. One such manager was a woman, Andrea Jung who was of Chinese descent and joined the company in 1994 as the President, Product Marketing Group in the United States of America (www.avoncompany.com). Later on, she was appointed as the CEO of the company in 1999 and was elected Chairperson in 2001. It was during her tenure that the cosmetics giant again suffered disappointing growth rates in the year 2000, faced with the rapidly changing marketplace (weblog.xanga.com). It was then that she implemented a number of grand strategies to reinforce the company image and induce a positive growth rate.

The strategy included “expanding the product line in order to cater to a wide variety of populations of varied ethnicity of the world, involvement of a wide variety of distribution methods, entering the retail market and launching of internet sales for its products”. The grand strategy resulted in an appositive growth rate by 2002 and during the period 2002-2005, the company posted a revenue growth of 9.1% which was much better than its nearest competitors (weblog.xanga.com). A major success was attributed to the expansion and diversification in product strategies as a result of market research studies initiated at the behest of Ms. Andrea Jung.

The company’s average return from investment during this period catapulted to 35.7% as compared with the industry average of 17.2% (weblog.xanga.com). The other major contributing factor was the web-enabled electronic ordering system which was efficient, responsive with great ‘speed and flexibility of delivery (weblog.xanga.com). The use of technology and novel marketing techniques that were specific for different geographical locations in the world greatly enhanced the communication techniques, order taking, and supply, which reduced the operating costs. Sales increased by 70% in Russia and in China the retail market is being gradually replaced by direct selling (weblog.xanga.com). Shares of the company recorded a multifold growth with even better prospects for the future as predicted by financial analysts.

As a result of her grand strategy and vision, Ms. Andrea Jung has occupied the proud place in “The 50 Most Powerful Women” as rated by ‘Fortune’ magazine in the recent past (money.cnn.com). She has been successful in turning around the slump in the company to an annual savings of $ 200 million in 2005. She united the haphazard international operations into a uniform entity which resulted in this turnover. Read More