Avon Products Inc.

- 2009
Arya Vidya Utama
Fredric Marpaung
Irin T.
M. Nicky Has
Case Fact
Business Model: B2C
Distribution Channel: Direct Selling, Sales leadership, Limited
retail store sales, e-sales
Avon plays in 3 product categories: beauty, fashion, and
home
Beauty products dominate Avons sales

Problem Identification
External
US economy crisis
Competitor: Revlon, Mary Kay
North America sales dropped
Predicted by Euromonitor International Inc. that cosmetic markets
will see a slow down in volume demand
Internal
Avons brand lagged behind seven of their cosmetic companies in
customer loyalty
Revenue growth down 12.90% in the first quarter of 2009
High advertising cost
Customers seek for green image, not homey image

Revenue Comparison
2008 2007 % Rev % Ret on Sales
Rev Profit Ref Profit 2008 2007
Latin america 3,884 690 3,298 483 118% 18% 15%
North america 2,492 213 2,622 213 95% 9% 8%
Center & east
europe
1,719 346 1,577 296 109% 20% 19%
W eur., M.E. &
Africa
1,351 121 1,308 33 103% 9% 3%
Asia Pasific 891 102 850 64 105% 11% 8%
China 350 17 280 2 125% 5% 1%
Critical Factor Analysis
Drop of
revenue
growth in
North
America
Brand
image
mismatch
US
Economy
crisis
Competitor
Drop of
sales
Alternative Solution
Change Avons brand image to green image from homey
image
Push Avons sales in Latin America, North America, and
Central and Eastern Europe
Expand the market in Western Europe, Middle East, Africa,
Asia Pacific, and China
Recommendation
Push Avons sales in North America
Change Avons brand image to green image from homey
image
Expand the market in Western Europe, Middle East, Africa,
Asia Pacific, and China